The biggest crypto news and ideas of the day |
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Ethereum Proof-of-Work Fork Timing Is Posted: Ethereum's proof-of-work (PoW) fork will occur 24 hours following the Merge, according to the network’s developers in a Twitter thread. Ethereum PoW is a splinter from the Ethereum blockchain that will continue to be secured by miners as miners are unwilling to give up their income stream. The thread didn’t specify a precise time, saying that information would "be announced 1 hour before launch with a countdown timer." The Merge is expected to take place on either Wednesday or Thursday. U.S. Inflation Is Higher Than Expected in August, Bitcoin Dips 4%: U.S. inflation rose 0.6% in August, upsetting analysts' predictions that inflation would moderate as it did in July. The unexpected increase is regarded as a sign that the U.S. Federal Reserve will stay aggressive in raising interest rates. Bitcoin (BTC) rose 15% over the weekend in anticipation of a positive report for August but dropped 4% after the new numbers were released. Fidelity Considers Offering Crypto Trading to Brokerage Customers: Fidelity is contemplating whether to let individual brokerage customers trade bitcoin, according to a report in the Wall Street Journal. Earlier this year, the financial-services giant, which has more than 34.4 million individual brokerage accounts, announced plans to allow corporate clients to add bitcoin to their managed 401(k) plans. Fidelity’s move follows BlackRock (BLK) cooperating with Coinbase (COIN) to offer crypto trading to its institutional customers, showing that Wall Street continues to be attracted by crypto despite the volatility of digital currency markets. Crypto Custody Firm BitGo Files $100 Million Lawsuit Against Galaxy Digital For Breaching Merger Agreement: The lawsuit alleges that Galaxy Digital intentionally breached the firms' $1.2 billion merger agreement, which was announced in May of last year. Last month, Galaxy's reported a second-quarter net loss of $554.7 million following a plunge in the value of cryptocurrencies. Crypto Exchange Huobi Will Delist 7 Privacy Coins, Including Zcash, Monero: Huobi will begin delisting some privacy coins beginning at 08:00 UTC on Sept. 19 amid broader regulatory scrutiny of such tokens. The exchange paused spot and futures trading of dash (DASH), decred (DCR), firo (FIRO), monero (XMR), verge (XVG), zcash (ZEC) and horizen (ZEN) on Tuesday. On Aug. 8, the U.S. Treasury Department barred customers in the U.S. from using Tornado Cash, causing increased scrutiny on such tokens. Filecoin Miner RRMine Global Leaves China for Singapore: RRMine Global closed its mainland China operations and relocated to Singapore more than a year after China issued one of its harshest bans on crypto trading and mining. Many crypto firms have made a similar move to Singapore because of the city-state's perceived friendly regulatory framework toward crypto. Elsewhere, Hong Kong's HashKey Capital Ltd. received regulatory approval to manage portfolios of 100% crypto investments, joining the first batch of Hong Kong’s few licensed virtual asset managers that includes Huobi. – Xinyi Luo |
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Putting the news into perspective |
Nansen Casts Doubt on Merge-Initiated Staked ETH Sell-Off Nansen, a blockchain analytics firm, published a report on Monday addressing one of the principal fears raised by Ethereum’s monumental Merge event expected this week: that a significant number of so-called “stakers” could cause a major sell-off of ether (ETH) the second they get the chance. Sometime this week, if all goes according to plan, Ethereum developers will pull off the most sophisticated network upgrade in crypto’s short 13-year history. In an event called the Merge, Ethereum will port over its network security from the bank of miners that for years expended computing power to race for block rewards and transaction fees, using a system called “proof-of-work,” to a new model where ETH holders “prove” their stake in the blockchain. People have been able to stake ETH since the launch of the Beacon Chain in December 2020, by locking up their assets but earning rewards along the way. Some $20 billion worth of ETH has been staked to date, accounting for 11% of ether’s supply. |
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(Mathieu Stern/Unsplash) According to Nansen, more than 70% of all staked ETH is worth less today than when it was purchased. This is conceivably a good thing, the researchers argue, as ETH holders in the red are less likely to sell their assets into the market. Only 18% of so-called illiquid stakers (those who used a third-parties to stake) are “in profit.” Even more to the point, ETH stakers will have to wait another six to 12 months until the so-called Shanghai upgrade before they can unlock their bags. The Ethereum Foundation has also proposed a sort of “withdrawal queue” meant to prevent a mass sell-off. Nansen again crunched the numbers and found that if all current ETH stakers want to sell their holdings, the queue would extend for 300 days. While a mass sell-off of staked ETH is improbable, there’s still the chance that people who bought ETH recently specifically to trade on the headline-making event will sell after the Merge is completed. Buy the rumor, sell the news. Nansen’s research found other concerning details. Just five entities account for over 64% of all staked ether. Of those, three are exchanges – Coinbase (COIN), Kraken and Binance – accounting for 30% of staked ETH. Lido, an open financial platform run by a decentralized autonomous organization (DAO), holds the largest share of 31% of staked ETH. This sort of concentration raises serious concerns about Ethereum’s “credible neutrality,” and the chance that base-layer transactions could be censored. And that’s not purely theoretical: Following the U.S. Treasury Department’s sanction of Tornado Cash that effectively banned all U.S. users from touching the service, Ethereum validators will need to determine whether they blacklist wallets associated with that protocol. It’s the type of problem that doesn’t have a technical fix. – D.K. |
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Overheard on CoinDesk TV... |
"We want Etheruem to succeed. We want to see the Merge succeed." – Solana Co-Founder Raj Gokal, on CoinDesk TV's "First Mover" |
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Ethereum is grappling with the risk of censorship after The Merge (The Block) On Eve of The Merge Skeptics and Supporters Gird for Raft of Changes (The Defiant) Cryptoverse: Ether snaps at bitcoin's heels in race for crypto crown (Reuters) Will the Merge Really Make Crypto Greener? (Gizmodo) |
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