Last week’s biggest crypto news with a special bonus deal inside.
Top Crypto News Stories Last Week
Last week’s biggest crypto news saw Ethereum complete an important upgrade, FTX taking its first steps towards resurrection, and Bitcoin approaching a critical point in its recovery.
Ethereum Celebrates Shapella Upgrade
Ethereum holders and more pertinently stakers were celebrating last week as the blockchain successfully upgraded, allowing them to finally request their staking rewards after almost two and a half years.
The ‘Shapella’ upgrade is the most important since last year’s ‘merge’ which saw it move from a proof-of-work consensus mechanism to a ‘proof-of-stake’ one, and fears about a flood of ETH deluging the market proved vastly exaggerated.
Staking is one of the core concepts of a proof-of-stake blockchain, where users contribute to securing the network through the wallet associated with the blockchain in question. Stakers lock up a number of tokens as collateral, forming a kind of good behavior contract, and are rewarded for allowing the blockchain to use their wallet (or, more accurately, the device on which the wallet sits) to confirm transactions.
Ethereum stakers who decide to go it alone, as opposed to staking through an exchange, were asked to deposit a minimum of 32 ETH back in November 2020 into the Beach Chain contract. This was a high-risk move, given that it was not clear if the proof-of-stake switch was even going to work at that point. However, the minimum threshold to kick off the migration was met at the end of that month, with a staggering 17.8 million ETH eventually staked on the Beacon Chain.
After some false starts, the upgrade date was finally set at the end of last month, with stakers finally able to withdraw the rewards they had earned since September’s upgrade, as well as their initial deposit. This was no small thing; the enforced hold represented a near 3x return on the lock-in price, and with a minimum of 32 ETH staked by each contributor, this equated to a handy $36,500 profit per person going by the prices leading up to the Shapella upgrade.
This led to fears (mainly from Ethereum critics) that all the freshly released ETH would flood the market, crashing the price as people cashed in. This was despite the Ethereum Foundation making it very clear weeks before the upgrade that they had mechanisms in place to avoid such a catastrophe.
In the event, less than 4,000 stakers queued up to withdraw their funds at zero hour, with exchanges advising that it could take weeks for their users’ requests to be honored, aiding in the allaying of these fears. In the days following the successful upgrade the price of ETH actually bounced from $1,875 to over $2,100, acting as the final nail in the coffin for doom-mongers.
With staking now activated, the next hurdle Ethereum developers have to work on is scaling, with Ethereum’s transaction times and speeds still lagging behind many more nimble competitors.
FTX “Dumpster Fire is Out” Says Attorney
An attorney representing the collapsed crypto giant FTX made big crypto news when he said last week that the “dumpster fire is out” at the exchange, and hinted at a possible resurrection later in the year. Andy Dietderich also revealed that the exchange is now sitting on over $7 billion worth of recovered assets, aided by the rise in the value of cryptocurrencies since the exchange’s collapse in November.
This puts FTX around $1 billion short of the total it is said to owe creditors, but it isn’t clear whether some of those funds will be diverted toward reopening the exchange …read more
Dietderich was giving an update on the situation at FTX, which current CEO Jonn Ray III famously described as being “worse than Enron” when he took over in the wake of the implosion, telling Delaware’s Chancery Court that the situation had “stabilized” and that thoughts were starting to turn to the future of the company.
Foremost in the minds of those in charge of the bankrupt firm is what to do with the $7.3 billion in cash and assets it finds itself sitting on, a figure which has grown from the $6 billion that was cited at the end of 2022 thanks to the 50% rise in the value of the crypto market in 2023.
With FTX owing some $8 billion to creditors, the company may be in the position to make creditors whole quicker than they thought, although the prospect of turning these assets into ready cash is only part of the problem; as MtGox creditors have found, the logistics of arranging returns to customers can be devilish and time-consuming.
There is a chance, however, that some of this money doesn’t make it back to creditors anyway. This is because Ray and his colleagues are considering relaunching FTX later in 2022, for which they will need money. This is not a surprise, given that the infrastructure behind FTX was its most impressive feature – whatever was going on behind the scenes, users almost always enjoyed a flawless trading experience.
Of course, FTX could still sell its code and infrastructure, but the preferred option would be to bring it back to life and run it as a properly regulated crypto exchange. Dietderich echoed Ray’s previous statements that FTX could be brought out of bankruptcy, although he was coy on how this would be funded:
“It is not clear whether FTX should use its own funds to restart the exchange, rather than using the money to repay customers. Restarting the exchange might require outside funding or a sale of the exchange’s assets.”
The crypto world is divided on whether it would actually use a relaunched FTX, with a poll on the popular crypto Telegram group Unfolded finding that 57% of the 10,800 respondents would use it, compared to 35% who would not.
Is Bitcoin’s Rally About to End?
In other crypto news, Bitcoin has been on a tear in 2023, driving the entire crypto market up and increasing in price by more than 100%. This has led to some believing that a new bull market is underway, but history has shown us that, in fact, the top of the rally may be just around the corner …read more
When Bitcoin hit $15,500 in November 2022, few people would have predicted that it would be passing $30,000 five months later. The fact that it has bounced so spectacularly, proving many critics wrong in the process, has led many to think that this is the start of a new market cycle. Up to this point, any such claims have been without foundation, but there are striking parallels between what Bitcoin is doing now and what it did in the wake of the 2017 rally, suggesting that we are about to find out if this is a true bull market or not.
The reason why many are suggesting that Bitcoin’s rally may soon be over is because it is approaching the same area of price, relatively speaking, that killed the temporary rally during the last bear market. After topping out in December 2017 at $20,000, Bitcoin collapsed to $6,000 and then bounced back up to $12,000 again, all in the space of two months. This $12,000 level acted as the ceiling to Bitcoin’s bounce, however, and when it rejected at this price, it acted as confirmation of a bear market.
Bitcoin tried several times over the next two and a half years to get back over this $12,000 barrier but failed every time. When it finally managed it in October 2020, it was seen as the official starter pistol for the next bull run.
This is remarkably similar to what we’re witnessing now. When Bitcoin hit $65,000 in May 2021, it collapsed 50% in a matter of weeks, stopping at $32,000 and rebounding back up to $69,000. When it fell away after this second peak it dropped to $26,800, and it was clear that history was repeating – unless Bitcoin could get back over that key level of $32,000, the bull market was officially over. It tried in May 2022 but failed, and Bitcoin has been in a bear market ever since.
11 months later and Bitcoin is approaching this make-or-break level for the first time since the 2022 collapse. The situation is the same as it was in 2019; if can overcome this barrier first time then those predicting a bull market are likely right, but if $32,000 acts as a ceiling again, as $12,000 did last time around, then the optimists can kiss goodbye to their dreams of a million dollar bitcoin…at least for now.
Trending Crypto News stories:
- In other crypto news, Bitcoin futures and options are to be listed on the London Stock Exchange for the first time after regulators cleared its first applicant
- Twitter and eToro have teamed up to integrate crypto and stock trading into the platform, with trades carried out through the exchange
- Coinbase CEO Brian Armstrong has said that the exchange will integrate the Lightning Network, but gave no timeframe
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