Crypto market recaptures $1 trillion
Optimism has returned to crypto, with the total market value reclaiming $1 trillion as investors speculate that prices have already hit their bottom.
Bitcoin tapped $24K on the changing sentiment, matching a rally in traditional markets led by tech stocks including Nvidia and Netflix. This resurgence was followed by a brief dip on Wednesday, as Tesla revealed the sale of 75% of its Bitcoin. Nevertheless, the leading crypto remained buoyant, with economist Mohamed El-Erian suggesting that “the damage has been absorbed” and that we now “have a better base to go forward.”
Meanwhile, coins across the Ethereum ecosystem were rising on a tide of optimism. Ethereum itself added 15% after Vitalik shared his vision of its future, while the Ethereum Name Service spiked 35%, Curve jumped 25% on news of a stablecoin, and Polygon pushed 20% higher on the release of a new scaling network. Elsewhere, old rival Ethereum Classic is boasting 30% gains.
This Week’s Highlights
– Bitcoin shrugs off Tesla’s $936 million sale
– Ethereum rises 15% on ‘Verge’ and ‘Splurge’ plans
Bitcoin shrugs off Tesla’s $936 million sale
Elon Musk’s Tesla revealed on Wednesday that it has cashed out 75% of its Bitcoin holdings, catalyzing a small dip for the leading cryptoasset.
According to Musk, the sale was driven by uncertainty over disruption to production in China, which has seen its economy hit by strict COVID lockdowns.
Nevertheless, prices were quick to recover, and Musk was quick to clarify that the sale didn’t reflect a judgment on Bitcoin: “We are certainly open to increasing our Bitcoin holdings in the future” he said on the earnings call. “This should not be taken as a verdict.”
Ethereum rises 15% on ‘Verge’ and ‘Splurge’ plans
Ethereum’s outperformance could be rooted in optimism around ‘The Merge‘ — the blockchain’s long-awaited switch to proof-of-stake.
Details of the upgrade were revealed by Vitalik Buterin at a conference last Thursday, when he outlined further plans for a ‘Surge, Verge, Purge, and Splurge’ that will follow the Merge, and eventually enable the network to support 100K transactions per second.
Ethereum prices rose 15% following the presentation, but the biggest beneficiary was Ethereum Classic. The Ethereum fork soared almost 30% over the week on speculation that it will benefit from migrating Ethereum miners.
According to a recent report from Citibank, the stress faced by the crypto market appears to be coming to an end — suggesting brighter skies could be ahead.
In the coming week, crypto could get caught up in the movements of traditional markets, with several of the largest US companies — including Microsoft, Apple, and Amazon — set to release earnings reports.
Wednesday’s Federal Reserve meeting could also have a big impact on global markets. The US central bank is widely expected to announce a 75-basis-point interest rate hike, but some market participants are expecting a 100-basis-point raise.