This July has brought some interesting news to the wild world of crypto, particularly given the year we seem to be having! The Ethereum Merge has been projected for September; a move away from Proof of Work consensus mechanism, and Tesla has sold three-quarters of its Bitcoin holdings in a rather unprecedented move. Also, the Otherside Metaverse has been showcased, resulting in a remarkable rise in the price of ApeCoin. Finally, cryptocurrency lending platform, Celsius, has filed for bankruptcy and may not be open for withdrawals for some time—although they are still in business, so there may yet be light at the end of the tunnel for investors. 

ETH Merge (Ethereum 2.0) Projected for September 

Ethereum’s highly anticipated transition to Proof of Stake is projected for September, which aims to make it more scalable, more secure, and more sustainable.  

The highly anticipated Merge will see Ethereum transition from the energy-intensive Proof of Work consensus mechanism to a more efficient Proof of Stake system—projected by Tim Beiko of the Ethereum Foundation to take place the week of September 19. 

The switch is expected to cut the Ethereum network’s energy usage by as much as 99.95%, as well as introduce a host of benefits with regard to security and scaling. Although Beiko acknowledged the timeline for the transition is expected to change, it is certain to go ahead. 

Proof of Work, which was first introduced by the Bitcoin blockchain, has been criticised for its large energy consumption, especially considering the other means of consensus available to cryptocurrency networks. Rather than requiring ‘miners’ to compete to solve complex equations, the Proof of Stake system exchanges mining for validating, granting authority to validate transactions based on the amount of the token that the user is staking.  

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Proof of Work vs Proof of Stake
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The Merge is expected to lower transaction fees on the Ethereum network, improve the speed of transactions and drastically reduce the energy consumption of the network. Following the announcement of the September projection, the price of Ethereum surged 80% from its June low.   

Tesla Sells 75% of its Bitcoin 

Tesla has sold 75% of its Bitcoin for close to US$963. Despite this, there are yet to be any major implications on the price of BTC.    

In February of 2021, Tesla announced it had added about US$1.5 billion of Bitcoin to its balance sheet, causing a huge rally in the price of Bitcoin, closely followed by the remainder of the crypto market. However, as disclosed in its most recent quarterly earnings report, Tesla has converted 75% of its Bitcoin into fiat currency. 

Its current Bitcoin holdings are around US$218 million, as, according to Tesla, they were hurting their second-quarter profitability. Tesla CEO Elon Musk, known for his occasional interest and curiosity in the crypto market, remarked that the Bitcoin was sold due to Covid-related uncertainty—though he made certain to clarify the sale should not be regarded as a verdict on Bitcoin. The sale has certainly hurt confidence in cryptocurrencies; however, Musk is known to be a firm supporter of crypto, and this event, surprisingly has yet to have any major implications on the price of Bitcoin.  

The Otherside Metaverse Results in a Price-Pump of ApeCoin 

A first look at the Otherside Metaverse, created by Yuga Labs and connected to the Bored Ape Yacht Club ecosystem, led to a massive surge in the price of ApeCoin.  

Yuga Labs, creators of the Bored Ape Yacht Club (a popular collection of NFTs on the Ethereum blockchain), worked together with Improbably Worlds Limited to build the Otherside Metaverse, as a means of expanding the Bored Ape ecosystem—one of the most successful collections of NFTs, and one that is now generating a lot of interest. 

The first look into the Otherside, during which roughly 4,500 people explored an immersive virtual world via a demo on July 17th, caused a serious stir, and there has been growing excitement in anticipation of the project. The metaverse project is powered by ApeCoin (APE), which soared in price following the initial foray into the Otherside.  

With regards to the Otherside experience, the gameplay is designed to engage with users on a narrative level, creating a fulfilling, immersive experience while capitalising on the growing propensity among gamers to purchase land, items, skins, and other digital assets as part of their gaming interactivity.

Celsius Network Files for Bankruptcy 

Cryptocurrency lender, Celsius, has filed for bankruptcy – though they are still in business, so there may yet be light at the end of the tunnel.  

Cryptocurrency lender Celsius Network fell prey to the crash in crypto prices, and the May collapse of the TerraUSD token. Having paused withdrawals last month, Celsius chose to stabilise its business interests and protect its customer base by filing for bankruptcy—and it still has liquid cash on hand to support its operations during restructuring. 

We deeply sympathise with those investors who lost money as a result of this filing. What happened to Celsius Network was unexpected, sudden, and something even market experts did not predict.  

One silver lining is that Celsius has filed for Chapter 11 Bankruptcy, meaning they will continue to operate, attempt to restructure their business and try to pay off their debts. There may well be light at the end of the tunnel, and although they have frozen withdrawals, there’s every chance they’ll bounce back. 

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