The cryptocurrency market is dropping. Bitcoin slips below $19,000 as Ethereum drops 9% and nears $1K. My question is what is causing this uncertainty?
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Grayscale Sues SEC Over Bitcoin ETF Rejection
Let’s jump in, starting with our top story of the day. The SEC Rejects Grayscale’s Spot Bitcoin ETF Application. Grayscale decided to Sue, Grayscale Sues the SEC over their Bitcoin ETF application rejection. Then the market instability followed.
Why did they get rejected? The SEC rejected them, citing concerns about market manipulation, the role of tether in the broader Bitcoin ecosystem, and also the lack of a surveillance sharing agreement between a regulated market of significant size and a regulated exchange. This is nothing new. These are the exact same reasons they’ve rejected other Bitcoin ETF applications over and over again. Is market manipulation a valid concern now? Is the lack of surveillance sharing a valid concern as well?
I think the biggest reason they’re scared of something like this is because they can’t control the cryptocurrency market like they can’t control the U.S. markets. Cryptocurrency is global and trades 24/7 with crypto trading bot or without it, as opposed to the US stock market, which just shuts down at the same time each day. In Grayscale’s lawsuit, in their filing they simply asked the U.S. court of appeals of the District of Columbia to review the SEC’s order, Akka they’re appealing a direct quote from Grayscale’s CEO.
He says, “Grayscale supports and believes in the SEC’s mandate to protect investors; maintain fair, orderly, and efficient markets and facilitate capital formation – and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market.”
So, essentially, what Grayscale’s attorneys plan to argue is that the SEC has already allowed similar products that are like other products already trading, in this case Bitcoin futures ETFs in the U.S. markets. That’s a good point. Why are Bitcoin futures allowed to trade openly on U.S. markets? But a Bitcoin spot ETF isn’t. Shouldn’t they be held to similar standards? We will have to see how this lawsuit plays out. Give me your thoughts on this down below. In my opinion, the one thing we do need, one way or another is just clarity from the SEC. So the US doesn’t fall behind.
Ethereum 2.0 Gets Delayed AGAIN!
And next up. There is breaking news, if you hold Ethereum. The difficulty bomb has again been delayed. The Gray Glacier upgrade goes live on the Ethereum network, pushing the difficulty bomb back another 100 days. And just to get specific, the upgrade called “Gray Glacier” occurred at this block 15,050,000 on June 30th, pushing the sole goal of introducing changes to the parameters of the network’s difficulty bomb back to this block or roughly a hundred days later.
So what is this difficulty bomb and what are the implications of the pushback? The difficulty bomb, which has been a part of Ethereum since its inception, is a piece of code responsible for exponentially increasing the difficulty of mining Ethereum. And thus, if you make it more difficult to mine, it disincentives miners to continue their operations as the network transitions from proof-of-work to proof-of-stake. So they originally put this into the code way back in the day to essentially make sure the merge happened. Hey, this difficulty bomb is going to go off. We better make sure we’re transitioned or in the process before that happens. Of course, we know time and time again that the difficulty bomb mechanism has been delayed. And previously, the difficulty bomb mechanism has been pushed back in five different network upgrades Byzantium, Constantinople, Muir Glacier, London, and the most recent Arrow Glacier upgrade in December 2021.
Well, now it’s June 2022 and they pushed it back again. So what does this mean for you as an Ethereum holder? Well, one thing that is different is that right now there is already an implementation of the merge live on Ethereum’s robest and test net since the beginning of June, and we were told that because of that, the full transition to the merge on the main chain could happen as early as August of this year. Of course, things have now changed, pushing the difficulty bomb back another 100 days. This, however, now makes it unlikely that this schedule will be met with the update to EIP-5133 proposal now pointing to mid-September as the new time frame for the implementation of the mechanism. If you hold Ethereum, does this anger you? I mean, they’ve done it time and time and again. Par for the course at this point, I’d say, but as I get more info, I will keep you updated.
Napster To Launch Token On Algorand Blockchain
Next up. A piece of bullish news for the Algorand Blockchain. Music Streaming Company Napster to Launch Its Own Token On Algorand. So the new token will be called Napster as per the streaming service, and the company did release a light paper outlining its plans to build out its existing music streaming ecosystem now on the layer one blockchain, although the launch date has yet to be announced.
In a direct quote from that light paper, “Napster will unlock all the opportunities of Web3 for fans, rights holders, and music makers”. They added that the Algorand blockchain is “the only carbon-negative blockchain infrastructure currently in existence”, and that’s why they liked it. The irony here is kind of funny to me because Napster was known back in the day for being able to copy and steal all the music all over the internet with no verifiable rights online to those music makers. This obviously gives those artists anything on the blockchain, which would in theory give those artists verifiable ownership of their work. And it should be noted that yes, they chose all grand because it’s a green blockchain, good for the environment. But also a few months ago, in May 2022, Napster was acquired by Blockchain from Algorand and Matt Zhang’s Hivemind Capital Partners, which continued to offer Napster’s paid music streaming service. All right, if you hold on to Algorand, you’ll love this. Let’s keep moving.
Chainlink Adoption HAPPENING NOW!
The next piece of adoption news for Chain link. Chainlink’s Smart Contract Products Go Live on the Fantom blockchain. Meaning two protocols, Keepers and VRF, will allow deploying more sophisticated applications on the Fantom network. So just to define these two products, Keepers is a decentralized transaction automation service from Chainlink that allows developers to automate any smart contract function using custom triggers. In other words, developers can set predefined conditions that Keepers continuously check, and when those conditions are met, it will trigger the smart contracts function, i.e. making developers’ lives easier. VRF, on the other hand, uses on-chain randomness that can generate fair in-game outcomes in blockchain games or randomly select governance participants for specific tasks. In a direct quote from the CEO of Fantom, “Having Chainlink VRF on Fantom allows our ecosystem developers to incorporate tamper-proof unpredictable outcomes into their dapps. That can be used for GameFi and NFTs (non-fungible tokens) or other real-world use cases.” All right, what do you think of this? It’s interesting because while all these L1s, even L2s, are competing with each other, Chainlink seems to be working with all of them or many of them.
FTX Passed on Deal to Purchase Celsius
The next piece of news will be an update on the situation with Celsius. Apparently, it’s being reported from the block that FTX Passed on a Deal to Purchase Celsius Due to Deficient Balance Sheet. And this is interesting because FTX did not pass on deals to take out small positions in Voyager and BlockFi. Some of those deals are still being negotiated, but it’s being reported that they did say no to Celsius. FTX had talks with Celsius over an acquisition, but walked away on account of a “$2 billion hole” in the lender’s balance sheet. Celsius was also difficult to deal with for Sam Freed, who ran the crypto exchange FTX or binance trading bot.
[This article is a transcription of a video made by Altcoin Daily]
[Original video: https://youtu.be/jRah1ihQlCE]