This Week in Coins: Bitcoin and Ethereum Rebound Despite Vauld and Voyager Woes

by James · July 9, 2022

This week in coins. Illustration by Mitchell Preffer for Decrypt

It was a great week for investors as almost all of the top 100 cryptocurrencies by market value grew in value, despite the lingering crypto winter that was exacerbated by insolvency problems at the crypto lenders Vauld and Voyager.

Bitcoin has jumped more than 12% in the last seven days to trade at $ 21,565 at the time of writing, according to CoinMarketCap. Meanwhile, Ethereum enjoyed an even bigger rally, giving more than 15% to $ 1,216.

Various leading projects increased by over 20% during the week: Uniswap increased by 30% to $ 6.33, Polygon increased by 26% to $ .59, and Avalanche increased by over 22% to reach $ 19.94. And Solana rose nearly 16% to $ 38.14.

Only one top 50 cryptocurrency actually weakened this week: UNUS SED LEO fell less than 1% to $ 5.73.

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“May not have fully revealed”

As prices picked up, industry news was full of stories about Vauld and Voyager’s financial difficulties, a week after the Singapore-based crypto hedge fund 3AC filed Chapter 15 bankruptcy after failing to meet margin calls from lenders, and barely fourteen days after the lender Celsius froze outlets due to financial problems.

On Monday, Singapore-based Vauld announced that it was suspend all withdrawalsdeposits and trades due to “volatile market conditions“and” financial difficulties to our key business partners. “Since June 12, the company has faced withdrawals totaling $ 197.7 million. Revenues fell recently, forcing the company to lay off 30% of employees last month.

In response to the news on Tuesday, cryptocurrency lender Nexo announced that it had signed an indicative term to acquire Vauld, and gives Nexo a 60-day exploration period to conduct due diligence. In anticipation of a satisfactory result, Nexo will buy up to 100% of the company and reorganize the business to deepen its presence in Asia.

Wednesday, cryptocurrency broker Voyager filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York. Voyager shares fell almost 12 percent on the news. The company revealed last month, it had an exposure of $ 661 million against 3AC.

It was also revealed on Wednesday that Alameda Research, the company founded by FTX CEO Sam Bankman-Fried, who last month gave a $ 500 million credit line to Voyager, owes the broker $ 377 millionaccording to Voyager’s bankruptcy notice.

That led to regulators in Texas and Alabama announcing that they are investigates Voyager’s collapse. Joe Rotunda, Director of Enforcement at the Texas State Securities Board, told Bloomberg: “What we are seeing now is that many of these crypto-lending companies may not have fully revealed what they were doing in the back with investors’ money.”

Elsewhere

The LDO token for Ethereum’s stakeholder solution Lido rose staggeringly 51% this week as Lido’s staked Ether (stETH) token was slow repegging. Lido’s Staked Ether is a big part of Celsius’ ongoing liquidity crisisbecause the lender had invested customer funds in Lido and currently has at least $ 487 million worth of stETH in a public walletaccording to Nansen.

Staked Ethereum has been issued by Lido to represent Ethereum which has been unlocked in Ethereum’s Beacon Chain – a network that will be merged with Ethereum’s core network in the coming months in an upgrade to transfer the entire network to a proof of effort consensus mechanism and, allegedly, reproduce the network 99.95% more energy efficient. After the merger, stETH will be able to be redeemed 1: 1 for Ether, so many expect a full repeg.

On Wednesday, Ethereum tested Sepolia transferred to proof-of-effort. Ethereum developers have now tested the merger on two public test networks, including Ropsten. Only one more test network (Goerli) remains before the entire network completes “The Merge”.

Registrations on the Ethereum Name Service (ENS) rose 216% last week, with 64 000 addresses created on Sunday and Monday only. ENS is a decentralized domain name protocol on Ethereum that allows people to swap their traditionally unwieldy wallet addresses for more memorable “.eth” domains.

Finally, ProShares’ Bitcoin Short ETF (BITI) grew 306% last week to become the second largest Bitcoin ETF in the United States after ProShares own Bitcoin Strategy futures ETF (BITO). BITI now has a net card exposure equivalent to 3,811 BTC, up from just 937 BTC on June 27, according to Exciting researchwhile BITO has around 32,000.