Cryptocurrency values recorded a new jump in early Friday morning, before easing off before the weekend. Overall, this week has been positive for cryptocurrency prices and even though there is chaos, there seems to be more certainty than a week ago.
Solana (quotation SOL) has seen a rise of 4,1% in the past 24 hours, starting at 15.00pm ET, and has surpassed 20% since Wednesday's low. Polkadot (DOT) is up 2,7% on the last day and 15% since hitting a low earlier in the week. XRP (XRP) was up near double digits this morning and today is up 1% and 8,8% from this week's low.
ETH ready for The Merge
Developer Tim Beiko has proposed September 19 as a tentative date for “The Merge” on Ethereum (ETH) that will change the consensus mechanism from proof-of-work to proof-of-stake. There have been several tests and years of development for this change. The hope is that transactions per second will increase and the cost of transactions will decrease after The Merge. At least for the moment, we have a deadline in mind.
The liquidation of Three Arrows Capital continues to be rife with chaos, with liquidator Teneo hiring Singapore-based law firm WongPartnership to gain access to hedge fund assets in the region. He also hopes to sue co-founders Su Zhu and Kyle Davies, who disappeared after the fund collapsed.
DeFiance Capital, a cryptocurrency hedge fund, said it was "materially affected" by the liquidation of Three Arrows Capital, announced in June. This could be another company facing financial woes as the Three Arrows Capital risk has come to light.
On the regulatory front, SEC President Gary Gensler said the agency is considering exempting cryptocurrencies from certain security laws. This is in the hope of easing the regulatory burden for some companies. Regulatory agencies have been grappling with cryptocurrency management for years, and some solid rules would be welcomed by the industry, but they haven't arrived yet.
Now what could happen?
The financial fallout of multiple delinquencies and bankruptcies continue to affect the cryptocurrency industry, and this will likely take time yet. But the work of building and improving the blockchain continues and we are seeing it with Ethereum this week. If the merger goes through as hoped in September, it could be very positive for cryptocurrencies in general.
Investors will also want to keep an eye on regulatory markets. Cryptocurrencies have been in regulatory limbo for years, but both the EU and the US seem interested in putting in place rules that reduce risks to consumers and allow innovation to thrive. There may be some urgency in the United States. With the November elections, so lobbyists are busy drawing up legislation for the sector. But it may be some time before this has a real impact on the innovations built on the blockchain.