Ethereum Breaks $2000 as Merge Date Brought Forward

Pixel animation of Ethereum coin symbol logo with neon lighting.

Ethereum surpassed expectations last week as it pushed on to the final stages of its transition to Proof-of-Stake.

After successfully implementing the merge of its final Goerli testnet, Ethereum developers blew away investors’ expectations by bringing forward the date of the final mainnet implementation by 4 days.

In an equally unexpected move, the world’s largest asset manager, BlackRock, joined the now long list of financial institutions involved in crypto by launching a brand new Bitcoin private trust.

Elsewhere, Ethereum enthusiasm rolled over into the meme cryptocurrency sector, and cryptocurrency mixer, Tornado Cash, was banned by the US Treasury Department.

  • Ethereum final testnet, Goerli, successfully implements The Merge 
  • Ethereum developers move Proof-of-Stake upgrade to September 15
  • World’s largest asset manager, BlackRock, launches Bitcoin private trust 
  • Dogecoin jumps higher as risk-on appetite returns
  • Cryptocurrency mixer, Tornado Cash, sanctioned by US courts

Ethereum’s final testnet, Goerli successfully implements The Merge

Ethereum investors were enthused last week as news broke that Ethereum’s third and final testnet, Goerli, had successfully merged. The coming “Merge” is set to take Ethereum from Proof-of-Work to the long-awaited Proof-of-Stake, which could have significant impacts on the price of ETH.

Investors warmly welcomed news of the successful test, “this means the Ethereum PoW network has a (roughly) fixed number of hashes left to mine.” 

The update of the final Merge date was accepted as an encouraging sign by many within the cryptocurrency community and increased bullish support behind Ethereum’s price. The Merge will now follow the Bellatrix upgrade that is set to take place on September 6th. 

Tweet from Ethereum developer Tim Beiko
Tweet from top Ethereum developer, Tim Beiko, who shared the final Terminal Total Difficulty for Ethereum. The date is now set for September 15th.

World’s largest asset manager, BlackRock, launches Bitcoin private trust

Financial institutions had been racing into the cryptocurrency space throughout much of 2021. Although the uptake has been slower in 2022, one has slowly followed another, and last week was the turn of the world’s largest asset manager, BlackRock.

Specifically, the asset manager has launched a spot Bitcoin private trust for its US institutional clients. The trust will track the price of Bitcoin and will allow institutional clients to gain exposure to the world’s largest cryptocurrency. As a result, the Bitcoin private trust will now now compete directly with Grayscale, which has been a popular choice for obtaining exposure to Bitcoin through a more traditional route. 

The move marks an incredible 360-degree change in Chief Executive Larry Fink’s thoughts on cryptocurrencies. In 2017, the CEO of BlackRock said, “Bitcoin just shows you how much demand for money laundering there is in the world”, adding “that’s all it is”. 

However, according to a statement released last week, BlackRock said, “Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets using our technology and product capabilities.”

Release of the new Bitcoin private trust comes days after BlackRock also confirmed that it would be joining its Aladdin investment technology platform to the cryptocurrency platform, Coinbase. 

The BlackRock logo shown on a laptop screen sitting in front of a candlestick chart

Ethereum developers bring the final Merge date forward

Shortly after the successful upgrade of the Goerli testnet, Ethereum developers were quick to announce that the final transition to Proof-of-Stake would be brought forward by approximately 4 days.  

Although initially aiming for September 19th, a blog post published on the Ethereum Foundation noted that developers were now aiming for a target date of September 15th. This was later confirmed by members of the Ethereum community.

The change in date was accompanied by confirmation that the Terminal Total Difficulty (TTD) would now be set at 58750000000000000000000. The TTD defines the point at which The Merge will be implemented. 

A date of September 19th had been provided as an estimate back in July, however, the date was seen as tentative given Ethereum’s previous inability to stick to deadlines. 

After the upgrade was confirmed, the price of ETH enjoyed a 14% rise over the subsequent 24 hours. 

Prices then continued higher throughout the remainder of the week, eventually pushing over $2,000 during weekend trading. 

Price chart of Ethereum between July and Augst 2022.
Price of Ethereum between July and August 2022.

Dogecoin jumps higher as risk-on appetite returns

Ethereum optimism rolled over into other sectors of the cryptocurrency markets last week including meme tokens, which enjoyed bumper gains in comparison to previous weeks. 

With renewed risk-on appetite, Dogecoin posted a 17% increase for the week and briefly pushed above a local area of resistance at $0.08. 

Thanks to the latest uplift in interest, DOGE also pushed back into the top 10 cryptocurrencies and now stands at a market capitalization of 10.2 billion. The meme coin edged out Polkadot which currently sits at $9.8 billion.

Even with the latest advances, Dogecoin remains far below the previous all-time highs of $0.75. The percentage increase from $0.08 to $0.75 stands at 864%. 

Sharp advances in the price of Dogecoin suggest that interest in meme cryptocurrencies is just as strong as ever if the macro environment remains stable. In fact, Dogecoin has outperformed both Bitcoin and Gold over the last month. 

Increases in DOGE over the last week were accompanied by rises in other meme cryptocurrencies including Shiba Inu, and Baby Doge. This has helped to push the total market cap of the meme cryptocurrency sector up to $19.7 billion.

Price performance of Dogecoin against other digital assets and equities between July 15th and August 15th 2022.

 

Price performance of Dogecoin against other digital assets and equities between July 15th and August 15th 2022.

Cryptocurrency mixer, Tornado Cash, is banned in the US

In a slightly concerning move, the Office of Foreign Asset Control (OFAC), that sits within the US Treasury Department, has banned the use of a decentralized application known as, Tornado Cash. 

Tornado Cash is an Ethereum mixer that allows users to keep transactions private by mixing cryptocurrencies within a central pool. Unfortunately, the application has also been exploited by malicious parties that have used the application to hide funds that have been acquired through hacking.

According to a statement released by the US government, Tornado Cash, had assisted with the laundering of over $7 million that had been accumulated through hacking. This included specific digital assets that were stolen in 2019 by North Korean hackers.

Alongside the demise of the Tornado Cash application and its associated token, TORN, the ban also caused considerable fallout throughout the industry. Several third-party companies and organizations banned users that had close links with the Tornado Cash app.

According to communications between CoinDesk and Coin Center Director of Communications, Neeraj Agrawal, it is slightly too early to speculate on the eventual fallout and what it means for other decentralized applications. 

“This is new territory. We are still seeing what is even possible. The second-order effects of the ban are still playing out, and it remains to be seen whether regulators can enforce such a wide ban or if crypto is capable of complying.”

 Tornado Cash logo next to the name

 

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