Ethereum (ETH) struggles at sub-$1,500 in the wake of the Thursday Merge.
Regulatory chatter spikes as the White House releases its first-ever crypto regulatory framework.
Sports keeps the metaverse and Web3 in the limelight, with Spain’s LaLiga going metaverse.
Post-Ethereum Merge Review
On Thursday, the heavily anticipated Ethereum (ETH) Merge took place, and the crypto market responded in kind. As seen with previous network events, ETH took a bearish turn. Buy the rumor and sell the news proved true once more.
For the current week, ETH is down 18.8% to $1,435. While the US CPI report has contributed to the losses, ETH slid by 12.5% Thursday through Friday as investors responded to the Merge.
ETHUSD 170922 Daily Chart
By contrast, the crypto market cap fell by 3.96%, Thursday through Friday, to $925.3 billion.
Ethereum was not the only victim of the Merge. Since Thursday, ravencoin (RVN) is down 31.6%, with ethereum classic (ETC) sliding by 13.5%.
For ETH holders, while the Merge may have eliminated the carbon footprint issue, the move to a Proof-of-Stake (PoS) protocol puts ETH in the crosshairs of the SEC.
On Thursday, the SEC chair reportedly spoke about staked cryptos, stating that PoS coins may fall under the SEC’s purview.
However, Dogecoin (DOGE) appears to be a beneficiary of the Merge in becoming the second largest Proof-of-Work protocol in the Post Merge era, behind bitcoin (BTC).
Celsius (CEL) Is on the Move in Hopes of a Business Revival
This morning, CEL is up 16.9% to $1.8899. While the US CPI report and the Merge have impacted crypto appetite, CEL is up 20.5% for the current week.
Hopes of a business revival and repayment of client funds frozen prior to the Celsius bankruptcy have driven demand. Going into the weekend, Celsius reportedly filed for permission to sell stablecoin holdings to fund operations. According to Reuters, Celsius will discuss the proposed sale at an October 6 hearing.
CELUSD 170922 Daily Chart
The Biden Administration Releases New Crypto Framework
On Friday, the White House released the first-ever comprehensive framework for the Responsible Development of Digital assets.
The first-ever comprehensive Framework for Responsible Development of Digital Assets looks to provide a framework to protect consumers, investors, and businesses and provide financial stability while addressing national security and environmental concerns.
One section of the White House fact sheet that drew market interest stated,
“The reports encourage regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) consistent with their mandates, to aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.”
Market reaction to the Friday report was mixed. The broader crypto market recovered from session losses to end the day in positive territory.
Total Market Cap 170922 Daily Chart
While Fed Fear Subsides, Recession Fear Resurfaces
Late in the week, Fed fear subsided. Currently, the split between a 75-basis point and percentage point rate hike is 82% to 18% in favor of a 75-basis point hike. Ahead of Thursday’s retail sales and Philly Fed numbers, the split had stood at 75% to 25% in favor of a 75% basis point hike.
FED Rate Hike Bets 170922
However, while Fed fear subsided, recession fears resurfaced in the wake of Thursday’s weak US economic indicators and the current inflation environment.
On Friday, the NASDAQ 100 fell by 0.90%, ending the week down 5.77%. News of FedEx (FDX) withdrawing its earnings forecasts, citing deteriorating market conditions, added to the market angst.
The Sporting World Drives a Pickup in Web3 Activity
On the brighter side, Web3 continues to evolve, largely thanks to the world of sport and large US conglomerates.
This week, Spain’s LaLiga soccer league announced plans to develop land in the Vegas City district of Decentraland (MANA) in a bid to more closely engage with Gen Z fans. LaLiga reportedly formed a new strategic partnership with StadioPlus to send the league virtual.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.