Even while there were occasional pieces of good news, the majority of the main cryptocurrencies fell this week, severely affecting the cryptocurrency market.
The majority of popular cryptocurrencies declined throughout the course of the week, and by the weekend, large hitters like Bitcoin and Ethereum had registered double-digit percentage losses.
According to information from CoinRateList, the price of one bitcoin is currently $21,309, a 13% loss.
By market value, Ethereum is the second-largest cryptocurrency in the world. At the time of writing, its price had dropped by roughly 18% to $1,635.
Despite a string of positive news in recent weeks, Ethereum has experienced a significant decline.
The previous few weeks have seen a little increase in the price of Ethereum as investors get ready for the network’s impending “merge” upgrade, which will see it switch from the energy-intensive proof-of-work (PoW) consensus process to the 99.95% greener proof-of-stake (PoS) system.
The financial behemoth JPMorgan said that Coinbase will benefit from the Ethereum merger in a statement to investors on Wednesday. The cryptocurrency exchange provides institutions with an Ethereum staking service and currently owns 15% of the market share for Ethereum assets.
Miners of bitcoin report losses
A $142 million loss for the second quarter was reported by publicly traded Bitcoin mining company Bitfarms on Monday as a result of rising energy costs.
In order to repay a loan from Mike Novogratz’s Galaxy Digital, the Quebec-based company sold 3,357 Bitcoin for $69.3 million during the quarter. According to a filing with the U.S. Securities and Exchange Commission, the company had 3,144 BTC valued at about $62 million as of the end of June.
Not only Bitfarms but several cryptocurrency mining companies have recently reported losses. The most recent Bitcoin mining company to sell more bitcoin than it mined in a month was Argo Blockchain PLC, which accomplished this last month. It had a $22 million outstanding amount on a Galaxy Digital loan that was guaranteed by Bitcoin as of the second week of July.
In May, publicly traded Bitcoin miners like Marathon Digital and Riot Blockchain sold more cryptocurrency than they mined, according to data from Arcane Research. This is a significant shift from the first four months of the year, when miners only sold 30% of their revenues.
The mining business has suffered as a result of the current combination of increased energy prices and a bear market in cryptocurrencies.
Celsius and Hodlnaut
On Wednesday, a New York bankruptcy judge gave Celsius, another victim of the recent wave of bankruptcies, permission to sell Bitcoin produced by its Celsius Mining subsidiary in order to pay creditors. The Bitcoin mining operation also declared bankruptcy on July 14, one day after the parent company.
The U.S. Department of Justice and the creditor committee objected to Celsius’s decision to spend $5 million to jumpstart Celsius Mining at the beginning of the bankruptcy proceedings in July, but they have since dropped their objections.
Hodlnaut, a struggling Singaporean cryptocurrency lender, applied for judicial management on Tuesday in an effort to buy more time to recover from recent liquidity issues, which led to the decision to suspend client cryptocurrency withdrawals two weeks ago. The application, which was formally submitted on August 13, precludes the company from having to sell off assets to cover any shortfall. Additionally, it will guarantee that the directors of Hodlnaut are replaced by an impartial third party to run the business and oversee operations while temporarily halting legal actions brought against the company.
Fed effects for cryptocurrency markets
The US Federal Reserve published updated regulations for crypto banks on Tuesday. The 49-page “Final Guidance” only uses the word “cryptocurrency” once, but it is implied throughout.
The rules specify how to grant so-called “master accounts,” a crucial financial status that enables direct payments with and access to the Federal Reserve, to “institutions offering new types of financial products or with novel charters.” All banks with federal charters have a master account.
The head of Colombia’s tax and customs agency, Luis Carlos Reyes, told Semana magazine on Monday that the country’s new administration planned to work on developing “a digital currency” that would “make transactions easier for the consumer.”
Many interpreted Reyes’ remarks as an indication that the central bank might be developing a digital version of the Colombian peso.