5 Things to Know in Crypto Today: ETH Surges Into $1,600s on “Merge” Optimism

Joel Frank
Updated: Jul 22, 2022, 17:24 GMT+00:00

Ethereum is leading a broad crypto rally that has seen Bitcoin push back into the mid-$23,000s.


Key Points

  • Ethereum is leading a broad crypto rally, underpinned by further “Merge” optimism as it rallies into the $1,600s.
  • An upbeat tone to macro sentiment is also lending support to crypto, with Bitcoin back in the mid-$23,000s.
  • US law enforcement is charging a former Coinbase manager plus two more with insider trading.

Ethereum Leads Broad Crypto Rally

Cryptocurrency markets are in an upbeat mood on Thursday as Ethereum leads a surge in the major altcoins. According to CoinMarketCap, the world’s second-largest cryptocurrency by market cap was last trading up around 8% in the last 24 hours, having rallied to its highest level since 11 June in the $1,630s.

The likes of UNI, SOL, AVAX, DOT and BNB are the next best performers over the same time period, according to CoinMarketCap, nursing gains of between 5-7%. Bitcoin is a slight laggard, up only around 2% in the past 24 hours. But its short-term technical outlook remains upbeat, with the cryptocurrency having been able to hold above its 50-Day Moving Average in the $22,600s after breaking above it earlier in the week.

The world’s largest cryptocurrency by market cap was last trading in the $23,500 area and eyeing a test of weekly highs above $24,000. Buoyancy in global equity markets this week has been a key factor supporting sentiment in crypto markets. According to Reuters, the MSCI World Index was on course for a sixth day of gains on Friday in early European trade, with a broadly positive start to the Q2 earnings season in the US having been the main factor to boost sentiment.

Upbeat earnings have helped equities weather persistent worries about the energy crisis in Europe, a larger than expected rate hike from the ECB and, most recently, data showing that the services and manufacturing sectors in the Eurozone have likely fallen into contraction this July.

Ethereum Co-founder Buterin Previews “Merge” and “Surge” at Paris EthCC

Ethereum co-founder Vitalik Buterin gave a talk on Thursday at the Ethereum Community Conference (EthCC) in Paris where he previewed his expectations for the upcoming “Merge” and following “Surge”. The “Merge” will see the Ethereum blockchain transition from an energy-intensive Proof-of-Work consensus mechanism to Proof-of-Stake by September, according to a tentative timeline recently laid out by senior developers.

According to Buterin, the “Surge” will see the Ethereum network updated to improve its scalability. “At the end of this road map… Ethereum will be able to process 100,000 transactions per second”, Buterin claimed. At present, the network can only manage up to around 30 transactions per second.

At current levels in the $1,630s, Ethereum is trading higher by over 22% this week and with gains of more than 50% on the month. Analysts have said that Fear Of Missing Out (FOMO) ahead of the upcoming “Merge” has been a key driver of the recent rally.

US Law Enforcement Arrests Former Coinbase Manager

US law enforcement has charged three people in its first-ever cryptocurrency insider trading tipping scheme, as announced by the US Justice Department on Thursday. Two have already been arrested, including Ishan Wahi, a former Coinbase Global product manager. Ishan had reportedly been feeding information about upcoming cryptocurrency listings on the Coinbase exchange to two outside sources, with the trio reportedly having made up to $1.1 million in gains on 25 assets.

SEC Announces Parallel Charges, Labels 9 Cryptocurrencies as Securities

The US Securities and Exchange Commission (SEC) announced parallel charges against the trio accused of insider trading, claiming that they violated antifraud provisions within securities law. In order to file these charges, the SEC claimed that nine of the 25 cryptocurrencies that the trio profited off of are classed as securities.

These included AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM. “Each of the nine companies invited people to invest on the promise that it would expend future efforts to improve the value of their investment,” said the SEC in a document.

SEC Wants to Register Crypto Lending Services if They Operate More as Investment Firms

The US SEC is pushing to get some crypto lending platforms properly registered if they act more like lending firms, chair Gary Gensler said in an interview on CNBC on Thursday. “We have focused on this area because many of these firms…may well be investment companies taking hundreds of thousands or millions of customers’ funds, pulling it together, and then re-lending it while offering pretty high returns. Sounds a little like an investment company, or a bank, you might say,” Gensler told CNBC viewers.

“We’re going to work with the industry to get these firms properly registered under the securities laws,” he stated.

About the Author

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018. Joel specialises in the coverage of FX, equity, bond, commodity and crypto markets from both a fundamental and technical perspective.

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