Insights, news and analysis for the professional investor |
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Bitcoin (BTC) - $19,690.91 |
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Prices as of 9/16/22 @ 8:24 p.m. UTC |
Welcome to Crypto Long & Short! In a break from Crypto Long and Short’s usual bitcoin coverage, this week is all about Ethereum. That’s because the Merge – the blockchain’s upgrade from a proof-of-work (PoW) to a proof-of-stake (PoW) consensus mechanism – happened Thursday. One can argue this sets the stage for a battle for the future of the soul of crypto as the Bitcoin blockchain continues to be PoW. Will one prevail or will the two coexist about as calmly and coolly as the U.S. and the USSR did for several decades? Which one will the institutions pick? For those who are expecting clear answers to those questions, sadly, the data can’t give too much insight – yet! – Lawrence Lewitinn, CoinDesk editor-at-large |
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Institutions Are Still Wait-And-See With Ethereum |
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(geralt/Pixabay) The Merge has finally happened, and while bitcoin remains the preferred cryptocurrency of institutions (and one nation-state, El Salvador), Ethereum’s new consensus mechanism – and the scalability that is supposed to go with it – may attract some interest away from its bigger, older brother as the biting cold of the crypto winter continues. Still, institutions may be hesitant to jump all in on ether just yet. One reason is regulatory uncertainty. U.S. Securities and Exchange Commission Chair Gary Gensler said proof-of-stake cryptocurrencies may be viewed as securities, though the regulator said he wasn’t talking about any specific coins. Nevertheless, his comments helped cause ether’s price to take a hit Thursday. Meanwhile, it seems that if there were any flows from bitcoin to ether, much of that was stanched with the onset of the Merge. At the start of the day – Sept. 15 – that the Merge happened, ether was trading for roughly 0.0817 BTC on Binance, according to data from TradingView. Fifteen hours later, it was changing hands at 0.0746 BTC and continued falling. |
(Source: TradingView) That’s a depressing chart, one may think. Except that’s only five days of data. Let’s step back and look at how ether has been trading against bitcoin since the early days of the former’s life. Read the full article here. |
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The Ethereum Merge is done. - TAKEAWAY: Ethereum changed its consensus mechanism from proof-of-work to proof-of-stake at 6:43 a.m. UTC, opening a new era for the second-biggest blockchain. After years of development and delay, Ethereum is now on a vastly more energy-efficient system and should now consume 99.9% or so less energy. The completion of the Merge makes the network – which houses a $60 billion ecosystem of cryptocurrency exchanges, lending companies, non-fungible token (NFT) marketplaces and other apps – more secure and scalable. Read more here.
A South Korean court issued an arrest warrant against Do Kwon. - TAKEAWAY: According to the financial crimes unit of the Supreme Prosecutors’ Office, a South Korean court has issued an arrest warrant against Do Kwon, the co-founder of the now defunct stablecoin issuer Terraform Labs. The warrant includes five additional individuals who, like Kwon, are charged with violating the Capital Markets Act. The warrant comes four months after the collapse of the $40 billion Terra ecosystem and its algorithmic stablecoin UST. Read more here.
Wall Street firms announced the start of cryptocurrency exchange EDX Markets. - TAKEAWAY: Financial heavyweights including Charles Schwab, Citadel Securities and Fidelity Digital Assets announced the launch of a new cryptocurrency exchange. This is the latest evidence Wall Street is forging ahead in digital assets despite the crypto winter. The exchange will be led by CEO Jamil Nazarali, formerly a senior executive at Citadel Securities. The news follows an announcement last month from BlackRock, the world’s largest asset management, that it will give its institutional clients a way to invest into cryptocurrencies. Read more here.
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