Most Ether Stakers Are 'Underwater,' Glassnode Estimates
On Thursday, both BTC & equity markets rose, following a string of gains in previous days; in their report “Underwater,” Glassnode estimates that most ether stakers are.
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Bitcoin (BTC) rose above $21,000 for the first time in over a week and was up 7.2% over the past 24 hours in trading on Thursday.
Internet Computer's ICP and Polygon's MATIC led the charts in gains, with most major altcoins also seeing an increase. ETH, the second-largest cryptocurrency after bitcoin, rose 8.3%.
The price of cryptocurrencies has become increasingly tied to the performance of equity markets, which also rose on Thursday, with the tech-focused Nasdaq rising more than 2% and the S&P 500 and Dow Jones Industrial Average each gaining by more than 1%.
ETH 2.0 stakers are underwater, according to the Glassnode report
Ethereum's Sepolia testnet successfully merged its PoW chain with its PoS chain on Wednesday, bringing the highly anticipated Ethereum 2.0 upgrade and transition from proof-of-work to proof-of-stake one step closer.
Glassnode said that most stakers are "now firmly underwater" because of locked up Ether and price declines, in its market intelligence report.
Investors had to deposit 32 ether into an Ethereum 2.0 contract with no withdrawal date in order to become a validator on Ethereum's Beacon Chain, which launched in December 2020.
As of the time of writing, the total ETH that has been deposited is 12.98 million, with 62% of tokens (8.02 million) being deposited before the market's all-time high price in November 2021. Since then, Ether has dropped by approximately 75%, trading at around $1,240.
"With spot prices at $1,060, the average ETH 2.0 staker is currently holding a loss of -55%," Glassnode wrote. "Compared to the overall market for Ethereum, 2.0 stakers are shouldering 36.5% higher losses."
The latest prices
Celsius network pays off loans, which is a good thing.
In mid-June, Celsius Network faced liquidity problems and halted customer withdrawals. After paying off a loan on the DeFi platform Maker, the crypto lender was able to reclaim 21,962 wrapped bitcoins (WBTC), worth about $440 million.
CEL token's price momentarily rose to 92 cents, but has since fallen to around 84 cents, up 0.1% in the last 24 hours. Since the beginning of 2022, the token has fallen by 81%.
On decentralized lending platforms such as Maker, loans are generally overcollateralized, which means that the borrower has to provide more assets in value as a security for the loan than the amount of money it is borrowing. Krisztian Sandor pointed out that this was beneficial to Celsius because it got hold of the valuable collateral by paying back a fraction of its worth.
On Wednesday, crypto lender Voyager filed for Chapter 11 bankruptcy. This follows the high-profile closure of another crypto company in July. Crypto companies are struggling with liquidity issues, and lenders have to either acquire assets to repay customers or shut down altogether.
This week in cryptocurrency: the altcoin roundup
- Reddit launches “collectible avatar” marketplace: The social network's Polygon-based marketplace allows users to purchase blockchain-based profile pictures for a fixed rate. The images can be stored or managed on the company-owned blockchain wallet Vault. Read more here.
- Immutable X, a layer 2 scaling system, allows ether-to-dollar withdrawals: The scaling system enables users to sell layer 2-based ether (ETH) and have the proceeds deposited directly into their bank accounts. It is one of the first layer 2 services to allow users to take out U.S. dollars. Read more here
- Tornado Cash opens its interface: The privacy protocol is increasing transparency by inviting more people to review code. The fully open-source user interface (UI) means that anyone who wants to improve the design can simply review the code and make pull requests through its GitHub. You can read more here.
Our survey showed that
- In today's CoinDesk Markets Daily podcast, we examine the latest market movements and the end of the easy DeFi yield era.
- Celsius Network Repays Maker Loan, Unblocking $440M of Collateral: The troubled crypto lender finally paid down the remaining $41 million of its debt on the DeFi platform.
- Nikolai Yakovenko has used machine learning for a variety of tasks, from professional baseball to human genomics. Now he is applying it to non-fungible tokens.
- Euro's Fall Toward $1 Parity: What It Means for Crypto: The 1-to-1 exchange rate may add bearish pressures on bitcoin and inject volatility into euro-pegged stablecoins.
- Crema Finance Attacker Returns Almost $8M, Keeps $1.7M Bounty: The platform was attacked by a flash loan and lost more than $9 million in cryptocurrencies over the weekend.
- SSV DAO Will Distribute $10M in Grants for Staking Projects Before Ethereum Merge: The organization will distribute grants in USDC, ETH and SSV tokens.
- TON Foundation Establishes $90M Ecosystem Fund: The fund will support the development of TON-based projects and promote its user as a layer 1 blockchain through advisory services and financial backing.
- Johnson's Departure as British Prime Minister Leaves UK Crypto Ambitions in Limbo: Most likely successors have been relatively quiet on their Web 3 views.
- Aztec Launches DeFi Privacy Bridge Aztec Connect: The privacy system, now on the mainnet, allows users to interact with popular DeFi apps in a private way.
- In June, Argo Blockchain recorded gains in bitcoin production, but its profit margin narrowed. To mitigate the risk of increasing debt, the miner sold BTC.
- Ex-PayPal Executive Named CFO at Binance.US: Jasmine Lee will replace Eric Segal, who had been the interim chief financial officer since October.
Other markets include the financial sector,
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