This week in pieces: Bitcoin and Ethereum drop in double digits

This week in parts. Illustration by Mitchell Preffer for Decrypt.

It was a very red week for crypto, with most major cryptocurrencies depreciating over the seven days as heavyweights like Bitcoin and Ethereum posted double-digit percentage losses by the weekend.

Bitcoin is currently down 13% and selling for $21,309, according to data from CoinMarketCap.

Ethereum, the second-largest cryptocurrency in the world by market capitalization, fell almost 18% to $1,635 at the time of writing.

Ethereum’s massive downturn comes despite a string of good news in recent weeks.

Over the past few weeks, Ethereum’s price has been slightly inflated in anticipation of its upcoming “merger” upgrade, when the network is expected to move from the energy-intensive proof-of-work (PoW) consensus mechanism, to 99 .95% greener proof of stake (PoS).

In a note to investors on Wednesday, banking giant JPMorgan said the Ethereum merger would be voucher for Coinbase. The crypto exchange holds a 15% market share of Ethereum assets and offers an Ethereum staking service for institutions. JPMorgan expects these to give the exchange a competitive edge after the merger.

In another bullish sign for the network, Ethereum Name Service (ENS) records have doubled in the last four months. The news reflects an increased demand for .ENS domain names, which are a more convenient alternative to the string of random numbers and letters that typically make up a crypto wallet.

Almost all major cryptocurrencies enter this weekend at around 20% less than the previous one. Solana fell 21% to $36, Spotted fell 22% and is currently selling for $7.42, gimbal fell 19% to 46 cents, avalanche fell 23% to $23, Polygon fell 21% to 80 cents, Uniswap fell 21% to $7.18, and Classic Ethereum fell 24% to $34.

Bitcoin Miners Record Losses

On Monday, publicly traded bitcoin mining company Bitfarms released a $142 million loss in the second quarter due to higher energy prices.

During the quarter, the Quebec company sold 3,357 Bitcoin for $69.3 million, to help repay a loan from Mike Novogratz Digital Galaxy. At the end of June, the company held 3,144 BTC worth around $62 million, it said in a Filing with the United States Securities and Exchange Commission.

Bitfarms is not the only crypto-mining company to have posted losses recently. Last month, Argo Blockchain PLC became the newest Bitcoin mining company to sell more bitcoin than he mined in a month. As of the second week of July, he had an outstanding balance of $22 million on a Bitcoin-backed Galaxy Digital loan.

Data from Arcane Research revealed that publicly traded companies Bitcoin miners, like Marathon Digital and Riot Blockchain, sold more bitcoins than they mined in May, a huge change from the first four months of the year, when miners only sold 30% of their earnings.

The recent combination of rising energy prices and a crypto bear market has had a negative impact on the mining industry.

Holdnaut and Celsius

Singaporean crypto lender beleaguered Hodlnaut on Tuesday applied for judicial management in a bid to buy more time to recover from the recent liquidity problems, which led a fortnight ago to the decision to freeze client crypto withdrawals.

The request, which was officially filed on August 13, saves the company from having to sell its assets to make up for any shortfall. He will also ensure that an independent third party replaces Hodlnaut’s directors to manage the company and oversee business, while temporarily suspending legal action against the company.

On Friday, Holdnaut announced that he was cut 80% of its workforce, about 40 people, “to reduce company expenses”. The company is also in the process of pursuing ongoing proceedings with the Attorney General of Singapore and the Singapore Police Force.

Celsius, another victim of the recent wave of bankruptcies, won the approval of a New York bankruptcy judge on Wednesday. sell bitcoins generated by its subsidiary Celsius Mining in order to repay creditors. On July 14, a day after the parent company filed for bankruptcy, the Bitcoin mining operation also filed for bankruptcy.

At the start of bankruptcy proceedings in July, Celsius received approval to spend $5 million to relaunch Celsius Mining, a move that drew criticism from the US Justice Department and the creditors’ committee, although the latter have since dropped their objections.

Fed issues guidance on crypto banks

On Tuesday, the US Federal Reserve released new guidelines for crypto banks. While the actual 49 pages ‘Final advice’ mentions the word “cryptocurrency” only once, the subtext clearly invokes crypto.

The guidelines provide instructions for “institutions offering new types of financial products or with new charters” to be granted “primary accounts,” a key financial status that allows direct payments with the Federal Reserve and access to it. -this. All federally chartered banks have a main account.

Luis Carlos Reyes, director of the Colombian tax and customs agency, DIAN, Told Week magazine on Monday that the South American nation’s new government would seek to create “a digital currency” that would “makeeasier transactions for the consumer.”

Many took Reyes’s words as a hint that a central bank digital currency version of the Colombian peso might be in the works.

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