Since finding a bottom in mid-June, ether has massively outperformed bitcoin as investors anticipate a major upgrade to the ethereum blockchain.
Bitcoin hit a low of $17,601 on June 19 and is up around 31% since then as of Friday’s trading price, according to CoinDesk data.
Ether also hit its recent low on June 19 at $880.93, but has surged 106% since then.
The huge divergence in performance in the two cryptocurrencies come down to one major factor: a big upgrade in the ethereum blockchain. Ether is the native cryptocurrency of the ethereum network.
Ethereum’s upgrade, called the “merge,” is slated to take place on Sept. 15 after numerous delays. The blockchain will change from a so-called proof-of-work system to a model called proof-of-stake. A full explanation of the merge can be found here.
Proponents say that the move will make the ethereum network faster and more energy-efficient.
“The upcoming Ethereum Merge is the biggest narrative in crypto right now and explains why Ether has left Bitcoin in its wake in the past month,” Antoni Trenchev, co-founder of crypto trading platform Nexo, told CNBC via email.
“A blockchain that pitches itself as being energy efficient will always capture the imagination of the masses and that’s why Ether has the wind in its sails ahead of the Merge, a move to proof of stake.”
Sustainable rally?
Both bitcoin and ether are still more than 60% off their all-time highs — which were reached in November — as a result of a crash in the crypto market this year.
The industry has been plagued by a swathe of bankruptcy and liquidity issues and failed projects which led to nearly $2 trillion of value wiped off the entire market since the peak in mid-November.
But the recent ether rally, which has seen its price double in the space of two months, has been rapid.
One analyst said that the rally could continue but there may be some resistance at around the $2,000 mark. Ether was trading at $1,814 on Friday.
Jacob Joseph, research analyst at data service CryptoCompare, said that with no Federal Open Market Committee meeting scheduled for August and stocks seeing a rebound, “it is reasonable to believe Ethereum can still rally as we edge closer to the Merge.”
“However … $2,000 has proved to be a major resistance for Ether and the asset needs more wind behind its sail to break that level.”
Joseph added that bitcoin is unlikely to outperform ether in the near term.
There are risks to the ether price rally, according to Trenchev.
“Any further (unlikely) delays to the mid-September Merge will see an unwind in a large portion of Ether’s 50% rally since mid-July,” he said.
There is always the chance that traders take profits too on the huge rally, Trenchev said.
“The Merge, if successful, might well prove to be a ‘buy the rumour sell the news’ type event, given the jaw-dropping gains we’ve seen in Ether,” Trenchev added.
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The amount stolen in cryptocurrency heists is up 60% this year according to a report by Chainalysis, which estimates the industry has lost $1.9 billion in hacks from January to July of this year.
That’s up from $1.2 billion reported in hacks the year prior.
“No area of cryptocurrency-based crime is bucking the 2022 trend of declining revenue like stolen funds,” the blockchain analytics firm said in a blog post on Tuesday.
The upward trend is also likely to continue, given the increasing severity of crypto hacks this year. $192 million was just stolen this month in a hack on Nomad bridge alone, followed by another $200 million stolen from 8,000 hacked Solana wallets later in the same week.
Much of that is largely due to DeFi protocols, which hackers have been targeting since 2021, Chainalysis said. Protocols, which are programs that connect crypto transactions without a middleman, can make users vulnerable to hackers, as they’re based on open-source code that can be studied by would-be thieves before executing a heist.
The research firm added that cyberattacks have largely come at the hands of North Korean hackers, who US authorities alleged stole at least $1 billion in crypto hacks and laundered money via Tornado Cash, a so-called crypto mixed which the Treasury Department sanctioned this month. Chainalysis estimated those heists likely stemmed from hackers finding an in through DeFi protocols.
Surprisingly, crypto scams are down this year, despite a big rise in 2021. The amount stolen in scams fell 65% to $1.6 billion, which Chainalysis said is in tandem with the fall in the price of bitcoin, which is down about 50% since January.
“Nobody likes a crypto bear market, but the one silver lining is that illicit cryptocurrency activity has fallen along with legitimate activity … Still, with huge increases in stolen funds, we can’t afford to rest on our laurels,” the research firm warned, pointing to the need for increased regulation in the blockchain.
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A special committee for bankrupt crypto lender Celsius is investigating “allegations of misconduct,” at the company, a lawyer for Celsius said Tuesday.
Joshua Sussberg of Kirkland & Ellis, the lawyer representing Celsius, said in a bankruptcy hearing that the two new board directors that Celsius appointed this summer — David Barse, the former CEO of Third Avenue Management, and Alan Carr, the founder of restructuring services firm Drivetrain — could “take remedial action” depending on the findings of their investigation.
The Celsius bankruptcy docket has swelled with hundreds of letters from Celsius users — its 1.7 million customers are its creditor base in the bankruptcy — with many suggesting they felt defrauded by the positive messaging of founders Alex Mashinsky and Nuke Goldstein.
Those letters pointed to cheery missives like a blog post from June titled, “Damn the Torpedoes, Full Speed Ahead,” which assured Celsius users that the company “has the reserves” to serve them, that they can make withdrawals, and that the company has a “world-class risk management team.”
“We try to read every one of these letters, and we take the accusations therein, as the court does, very seriously,” Sussberg told the court. “If there’s a there there, we are going to find out, and an investigation is being conducted.”
Gregory Pesce of White & Case, who represents the creditors committee (which is made up of a group Celsius customers), told the court about its own investigation. The committee has enlisted M3 Partners as its financial advisors, and hired Elementus, a boutique blockchain consultant to aid its inquiry, Pesce told the court.
Elementus will “help us with the important task of tracking the movements of cryptocurrency on the blockchain so we can find out where the coins went and when, and find out if there’s a way to bring them back to Celsius,” Pesce said.
Celsius is also fielding inquiries from US state and federal agencies and foreign regulators, who are looking into the company’s compliance with state and federal securities laws, Sussberg said. The company has also been cooperating with state lending and money transmitter authorities, he said.
Celsius faces an uncertain road ahead in the Chapter 11 bankruptcy process, where it could pursue a full scale reorganization, a potential sale of assets through bankruptcy, or a combination of both.
At Tuesday’s hearing, Martin Glenn, chief judge of the US Bankruptcy Court for the southern district of New York, also acknowledged broader existential questions facing Celsius, as bereft customers clamored about lost savings. One customer told the court that he had less than $500 left in his checking account, having put most of his savings in Celsius.
“I know this case has generated a great deal of interest, and I think it’s very important that the creditors, whether they’re represented by counsel or not, have an opportunity to make their views known,” Glenn said.
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Dog-themed cryptocurrencies jumped on Monday as broader retail-investor enthusiasm hit the market, particularly as Ethereum works towards its much-anticipated software upgrade.
Dogecoin is up about 14 per cent over the past five days, while Shiba Inu has gained almost 40 per cent, according to pricing data compiled by Bloomberg. The meme tokens are holding their gains even as Bitcoin hovers around $25,000 and Ether is at about $2,000 amid optimism surrounding its upgrade, known as merge, now expected about September 15.
“Dogecoin and Shiba Inu have both broken out over the weekend, clear evidence that the retail investor is back,” said Hayden Hughes, chief executive of social-trading platform Alpha Impact.
There is optimism that both coins will gain as Ethereum did because both are due for upgrades as well, he said.
The crypto market has shown some signs of recovery with its total market cap now at about $1.2 trillion, after having dropped to about $875 billion as of June 19, according to data from CoinGecko.
Lower-than-expected inflation prints out of the US last week boosted hopes that the Federal Reserve might be able to ease off its pace of rate increases, helping riskier assets like crypto.
Ethereum has also been supported after a final test stage before the merge upgrade, which co-founder Vitalik Buterin estimates will occur by about the middle of next month.
Still, not everyone is all-in on the memecoin trend just yet.
“These coins don’t have the depth of market at times like Ether or Bitcoin, so when a bit of demand comes through, they hit a liquidity pocket and fly up, drawing in more speculators,” said Cici Lu, chief executive officer at consulting company Venn Link Partners.
Alpha Impact’s Mr Hughes also sounded a note of caution about the rally.
As the financial world appears to have fallen out of love with bitcoin, the Channel Islands – a string of small British overseas territories – are quietly offering crypto investors incentives to move their money from more traditional tax havens.
Jersey and Guernsey – located off the French coast – are attracting crypto, blockchain, and other fintech firms thanks to their favorable tax laws.
Neither island has capital gains or inheritance tax, making them attractive locations for investment firms.
And even before crypto entered the mainstream, both islands had started competing for the booming asset class. Edmund Hatton, a fintech lead at Digital Jersey, said he first noticed clients discussing bitcoin and crypto back in 2011.
Jersey has attracted firms including CoinShares, which manages assets worth around $3 billion. The Swiss-based group used Jersey to establish its crypto-backed Physical Bitcoin exchange-traded product in January 2021.
Meanwhile, Guernsey Finance’s chief executive made a recent trip to Miami, which has established itself as one of the US’s best-known crypto hubs.
It’s part of an effort to lure western crypto investors to the island and away from rival tax havens like the Cayman Islands, according to Barney Lewis, a Guernsey-based fund manager at the investment firm ZEDRA.
“We’re competing directly against Cayman, and we’re seeing the migration of US funds out of there,” he told Insider. “Brazilian and South American investors have fallen out of love with Cayman, and are moving capital to Guernsey.”
The Channel Islands’ push to lure crypto investors has coincided with a widespread retreat from digital assets over the last nine or 10 months.
Bitcoin has plunged 49.7% to just under $24,000 so far in 2022, while fellow large-cap token ethereum has slid 49.8% to below $1,900 – a far cry from their respective all-time highs of $69,000 and $4,867 less than a year ago.
Stocks have also plummeted in 2022, meaning that traditional investors are starting to doubt crypto’s effectiveness as a potential portfolio diversifier, particularly as consumer inflation has rampaged to multi-year highs around the world.
“Six months ago, you’d see portfolios with traditional equity, fixed income, and then maybe 2.5 to 5% crypto as an inflation hedge,” Lewis said. “But it looks like a terrible inflation hedge now.”
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Ripple Labs Inc, which is embroiled in a high-profile battle with the U.S. securities regulator, is interested in potentially purchasing assets of bankrupt crypto lender Celsius Network, according to a company spokesperson.
“We are interested in learning about Celsius and its assets, and whether any could be relevant to our business,” the spokesperson said, declining to say if Ripple was interested in acquiring Celsius outright.
Ripple has continued to grow through the crypto market turmoil and “is actively looking for M&A opportunities to strategically scale the company,” the spokesperson said.
New Jersey-based Celsius froze withdrawals in June citing “extreme” market conditions and filed for bankruptcy in New York last month, listing a $1.19 billion deficit on its balance sheet.
Last week, lawyers for Ripple submitted filings to the bankruptcy court seeking to be represented in the proceedings. The court approved the filing earlier this week. Ripple is not among Celsius’ major creditors, Celsius’ bankruptcy filings show. Ripple provided the comment in response to Reuters’ queries regarding the court filings.
A lawyer approved to represent Ripple declined to comment. Celsius did not immediately respond to a request for comment.
Cryptocurrencies have had a rocky year, with the world’s largest, bitcoin, down nearly 70% from its all-time high of $69,000 in November. Markets were shaken by the collapse of the popular terraUSD and luna tokens in May, which caused widespread losses for several major industry players.
According to bankruptcy filings, Celsius’ assets include digital assets held in custody accounts, loans, a bitcoin mining business, the company’s own CEL token and bank cash and cryptocurrencies that Celsius has on hand.
Privately owned Ripple has not previously done any major deals. It was valued at around $15 billion following a private stock buyback in January, the company said, although industry valuations have fallen significantly during a cryptocurrency price crash over the past few months that helped topple Celsius and other cryptocurrency firms.
Ripple’s total sales of its cryptocurrency XRP, net of purchases, were $408.9 million in the second quarter, compared with $273.27 million in the first quarter, according to a report the company put out in July.
The company was sued by the U.S. Securities and Exchange Commission (SEC) in 2020 over XRP. The agency alleges that Ripple and its current and former chief executives have been conducting a $1.3 billion unregistered securities offering by selling XRP, which Ripple’s founders created in 2012.
Ripple and the executives have denied the allegations, and the company has argued that XRP has traded and been used as a digital currency.
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America’s largest cryptocurrency exchange Coinbase has reported a massive loss in both revenue and profit in the June quarter – logging $1.1 billion in net loss as revenue declined from $2.033 billion to $803 million from a year-ago quarter which is a drop of nearly 60 percent.
In quarterly terms, net revenue of Coinbase was down 31 percent compared to Q1, driven by lower trading volume.
“Q2 was a tough quarter, with trading volume and transaction revenue each down by 30 percent and 35 percent sequentially, respectively. Both metrics were influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike,” the company said after reporting its Q2 results late on Tuesday.
“On the expense side, we’ve taken several steps to streamline our cost structure, including an 18 percent employee reduction in June,” it revealed.
“The current downturn came fast and furious, and we are seeing customer behaviour mirror that of past down markets,” the company said in its shareholder letter.
Total trading volume declined to $217 billion, down 30 per cent compared to Q1. In contrast, total crypto spot trading volume declined 3 percent on a sequential basis, resulting in lower trading volume market share, said the company.
“Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management programme,” said Coinbase.
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After bitcoin fell as much as 75% from its peak, crypto markets appear to have “found a floor,” JPMorgan said in a note on Monday.
Bitcoin and ether have surged 36% and 102% from their mid-June lows, respectively, and the total market value of cryptocurrencies has reclaimed the all-important $1 trillion level, according to data from CoinMarketCap.
Analysts at JPMorgan said there are two reasons driving the recent strength in the cryptocurrency market.
“What has helped, we think, has been more limited new contagion from the collapse of Terra/Luna,” JPMorgan said, referring to the stablecoin implosion that led to tens of billions of dollars in losses and sparked a leverage unwind that wiped out crypto firms like hedge fund Three Arrows Capital and crypto broker Voyager Digital.
“However, we think the real driver has been the Ethereum merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022,” JPMorgan said.
The upcoming Ethereum event has been highly anticipated by investors. The merge is designed to transfer the Ethereum blockchain away from a proof-of-work network and instead to a proof-of-stake system, which is supposed to be faster and more efficient from an energy consumption perspective when mining.
A successful Ethereum merge later this year should help boost sentiment in the crypto markets, JPMorgan said. The merge is currently expected to take place in September, depending how the upcoming Georli testnet performs. That test is schedule for August 11 and is one of the last steps before the merge.
While ether sees a strong resurgence, there’s still a long way to go before it and the broader crypto market recover recent losses. Trading volumes in crypto continued to fall in July, and daily trading volumes in NFTs have collapsed 84% year-over-year, JPMorgan said.
Ultimately, the ongoing recovery of the cryptocurrency market could hinge on the upcoming Ethereum merge in the short-term as crypto investors look for a much-needed boost in sentiment.
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Barstool Sports founder Dave Portnoy has watched his investment in SafeMoon (SAFEMOON) crash by over 94%, proving to crypto enthusiasts that he is, in fact, capable of hodling during the bear market.
The stock trader and media personality took to Twitter Monday to lament his $40,000 investment in the meme coin, which has fallen to just $2,370.94 after he didn’t withdraw a single token. “Still holding by the way,” Portnoy said. “Diamond hands.”
Portnoy claimed that he’s also being sued by SafeMoon, possibly for “trashing” the project on his show, but didn’t elaborate much further. In a separate tweet, Portnoy shared a screenshot of SafeMoon’s sales manager expressing displeasure with the Barstool frontman for giving the company “a bad look and unfair representation.” Portnoy “mentioned his SafeMoon losses on air but failed to mention he hasn’t upgraded his holdings to V2 yet,” the manager complained.
Portnoy is no stranger to cryptocurrencies, having bought Bitcoin (BTC) in August 2020 only to sell it one week later due to volatility. He later expressed regret over his lack of conviction and went on to make several additional bets on cryptos, which included SafeMoon.
As far as prices go, SafeMoon is down over 99% from its all-time high of $0.00001399 in April 2021, according to CoinMarketCap. The coin has a lifetime return on investment of negative 86%.
SafeMoon was audited in May 2021 by blockchain security firm HashEx. At the time, the firm identified 12 smart contract vulnerabilities, including a “temporary ownership renounce” that made it especially prone to a rug pull.
Pro Gamer DAO (PG DAO) is thrilled and proud to announce its strategic partnership with GuildFi, the interconnected Web3 ecosystem of games, nonfungible tokens (NFTs) and residents.
PG DAO is extremely excited to partner with a like-minded team also consisting of experienced gamers whose vision is to create the best gamers experience for the current and future gaming audience.
GuildFi helps gamers discover games with high potential and helps game-makers connect with the right player bases for sustainability and long-term growth. The gaming guild acts as a scholarship aggregator and an all-inclusive platform while providing extensive tools that improve players’ success via boosting yields and compounding rewards and bonuses.
The community leaders of PG DAO consist of a unique group of hardcore, passionate gamers who appreciated and loved the development work of GuildFi in creating a seamless, all-inclusive platform dedicated to gamers and gaming communities.
Backed and incubated by Deuk Soteria Ventures, PG DAO was created by an elite, experienced group of pro gamers out of South Korea, a nation famously known for its extreme gaming culture. PG DAO’s ambition is to become the elite gaming community for gamers with the most extensive collection of resources. Most recently, PG DAO announced a partnership with League of Kingdoms, a top-tier gaming project with thousands of dedicated users.
That ambition is why it’s important for PG DAO to aggregate top-quality games and gaming NFTs. With this newly formed partnership, PG DAO and GuildFi will collaborate on actively bringing together more active platform users, community members and real gamers, contributing and joining hands to grow the ever-expanding crypto gaming ecosystem.
PG DAO will bootstrap its extensive player base to participate on the platform GuildFi provides, allowing members access to other guilds’ scholarships and gaming tools created specifically to enhance players’ performance while maximizing their rewards.
Ken Ko, core team member of PG DAO, said: “With an extensive gaming community established in Korea, we always welcome various opportunities to develop our decentralized autonomous organization (DAO) ecosystem and to further grow our community.
“Therefore, partnering with a robust and top-tier platform like GuildFi will benefit our DAO in both yield earnings and in-game profit.”
Jarindr Thitadilaka, project lead of GuildFi, said: “Collaborating with a community-driven guild such as PG DAO enables multiple synergies to be achieved.
“With GuildFi at the forefront of the Thai gaming community and PG DAO anchoring the Korean-gaming community, it enables us to bring forward more platform users, community members and active gamers in the Web3 gaming ecosystem.”