This Week in Coins: Ethereum and Avalanche Rally, Crypto Winter Still Not Over

This Week in Coins: Ethereum and Avalanche Rally, Crypto Winter Still Not Over
This Week in Coins: Ethereum and Avalanche Rally, Crypto Winter Still Not Over

This week in coins. Illustration by Mitchell Preffer for Decrypt.

Despite the ongoing cyptobear market, many of the top cryptocurrencies posted double-digit percentage gains during the week.

Bitcoin had no such luck. Bitcoin rose just 5.5% over the past seven days and is currently trading at $24,460 according to CoinMarketCap.

Ethereum rallied much harder. The No. 2 cryptocurrency and leading blockchain for high-performance smart contracts is up 16% in the past week to $1,984 at the time of writing, after hitting a high of $2,012 late Friday night.

The excitement around ETH is about the upcoming merger, when Ethereum will move to a more energy-efficient proof-of-stake (PoS) blockchain. Goerli, Ethereum’s third and final testnet, successfully switched on Wednesday evening.

On Monday, Glassnode data revealed that Ethereum derivatives traders are “extremely bullish” for September, the month of the merger, but will lean bearish by October.

On Coinbase’s most recent corporate earnings call, the company reiterated its emphasis on effort as part of its business model leading up to the merger. A recent letter to shareholders states: “In early August, we started offering Ethereum staking for institutional customers for the first time. We will continue to add more assets for efforts for both our retail and institutional clients going forward.”

Bitcoin and Ethereum prices reacted positively to this month’s inflation reading from the consumer price index (CPI) on Wednesday. Inflation remains unchanged from last month at 8.5%, a clear sign that the US central bank’s historical interest rate increases this year keeps prices under control.

How altcoins fared

Several so-called “Ethereum killers,” aka tier-1 blockchains with high-functionality smart contracts, posted big rallies: Avalanche (AVAX) inflated a staggering 55% over the week, until it gave up much of its gains on Friday night as ETH rallied. Much of the momentum was thanks to strong growth of NFTs on the blockchain. As of Saturday morning, AVAX was only up 15% over the past 7 days and was trading at $29.53.

Other Ethereum rivals that rose over the seven days: Solana (SOL) rose 14% to $46.32; The NEAR protocol rose 18% to $5.89, and FLOW grew 11% to $2.92.

Additionally, Chainlink (LINK) rose 15.4% to $9.16, and Ethereum Classic (ETC) — which hit a four-month high this week — is up 16% to $44.25.

There were no major losses among the leading coins.

Bear market news

The cold of crypto winter showed little sign of abating this week.

On Monday, Singaporean stock exchange Hodlnaut joined other lenders Vauld and Celsius and Singaporean exchange Zipmex on the list of crypto companies that have suspended customer withdrawals due to “the latest market conditions.”

Earlier this year, Hodlnaut received approval in principle (IPA) from the Monetary Authority of Singapore (MAS) “to provide digital payment token (DPT) services as a major payment institution.” The lender has now reportedly informed the Monetary Authority of Singapore (MAS) that it is withdrawing its license application and as a result no longer offers the Token Swap feature.

On Tuesday, German crypto bank Nuri filed for insolvency, saying the move was “necessary to ensure the safest way forward for all our customers.” Despite the proceedings, Nuri said customers still have “guaranteed access” to their euro accounts and crypto wallets.

The bank said the measures were due to “significant macroeconomic headwinds,” specifically the pandemic and Russia’s war on Ukraine, as well as “various negative developments” in the industry “including large cryptocurrency sales, the implosion of the Luna/Terra protocol, the insolvency of Celsius and other major crypto funds.”

On Tuesday, Zipmex announced that it was release of withdrawals for Bitcoin and Ethereum. Users have been able to withdraw Bitcoin since Friday; Ethereum holders will have to wait until next Tuesday, August 15.

Finally, during a hearing in Celsius’ Chapter 11 bankruptcy proceedings on Friday, lawyers representing a committee of unsecured creditors moved to block Celsius’ attempts to sell its mined cryptocurrency. The lawyers wrote in a court case that they first need more insight into how to sell their Celsius Bitcoin mining is to be carried out and how the proceeds from the sale are to be used.

Celsius Mining is Bitcoin mining subsidiary of Celsius Network. On July 14, a day after the parent company filed for bankruptcy, the mining operation also filed for bankruptcy.

Celsius has previously said it will use its mining to pay back creditors. At the start of bankruptcy proceedings in July, Celsius received approval to spend $5 million to start mining operations, a move that drew criticism from the US Department of Justice and now the creditors’ committee.

The committee also said it is launching a “wide-ranging investigation” and expects to invoke Bankruptcy Rule 2004.

All in all, a good week for crypto, but not so good for a few crypto companies.

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