Dear Teroxx Community,

This week we saw a digital asset market which was able to complete slight upswings in almost all digital assets.

Weekly overview

As usual, we are also providing detailed videos for those who want to delve deeper into the subject.

Digital Asset News

The upgrade from the current Proof-of-Work (PoW) to the PoS consensus process, known as the “Merge”, is finally scheduled to take place in September after a long wait. At the same time, the fundamental technical changes brought about by the switch will ensure that the monetary policy of the Ethereum blockchain is completely reset. For example, the amount of ETH in circulation will be reduced almost abruptly by a staggering 90%, which should have a considerable impact on the available supply.
“After the merge, Ethereum will have lower inflation than Bitcoin. Led by the burning of transaction fees, Ethereum will be deflationary, whereas Bitcoin will always be inflationary, even if it becomes less so with each halving,” as Raman explains.
Although the expert believes that Bitcoin will maintain its position as digital gold, at the same time, the analyst believes that Ethereum has a “much greater scope for adoption” because the smart-contract platform is the basic framework of Decentralized Financial Services (DeFi).
However, Raman admits that the upgrade won’t really lower ETH’s high transaction fees, which means the second-largest cryptocurrency won’t immediately achieve better scalability.

Further data from Glassnode supports the notion that selling pressure on bitcoin is slowly diminishing, with fewer and fewer BTC on crypto trading platforms as of late.
For example, BTC in the wallets of major exchanges currently account for only 12.6% of the amount in circulation, a 4.6% outflow since the big crash in March 2020.
In Bitcoin, this means a decline from 3.15 million BTC in March 2020 to only 2.4 million BTC in July 2022, which is also the lowest value since July 2018.

U.S. Senator Pat Toomey, who is known for his supportive stance towards the crypto industry, accuses the U.S. Securities and Exchange Commission (SEC) that the agency could have prevented the massive losses of investors in the crypto-savings platform Celsius, which are expected to amount to $12 billion. “Companies could have adjusted their products accordingly, which could have prevented investor losses, and the SEC could have now focused on going after the real bad guys.” By making the dubious assumption that digital assets are fundamentally securities, the SEC would be making it difficult for companies on the one hand, while on the other hand, regulation through law enforcement always means protection for investors only after it is actually too late.
The continued confusion for the crypto industry combined with some “lameness” in regulation would hurt both investors and innovation. By making these statements, Toomey supports the Wall Street Journal news magazine, which headlined that digital assets are “hostages” of the SEC.

Bitcoin (BTC) and Ether (ETH) derivatives contracts offered by CME Group saw record activity in the second quarter, providing further evidence that there is demand for digital assets among professional traders even during bear markets.
Average daily open interest (OI) in CME’s crypto futures products reached 106,200 contracts in the second quarter, the highest level ever, the company said Thursday.
Despite extreme market volatility in bitcoin and ether, CME Group’s crypto futures products were “a place of consistent liquidity and continued volume and open interest growth for investors,” said Tim McCourt, global head of equities and FX products at CME. He also said:
“Product diversity, including the smaller micro-Bitcoin and micro-Ether futures and options, provides greater trading flexibility and precision for many market participants, including large institutions as well as sophisticated active traders.”

Technical term of the week

Merge: Describes the upgrade from proof-of-work (Pow) to proof-of-stake (Pos). Currently, Ethereum, one of the best-known digital assets, is about to take this step. Analysts consider this a seminal event for Ether and the industry as a whole.

Digital asset market

Last week we saw market movements which can be seen as positive overall and thus strengthened the markets.Digital asset markets were unable to hold at previous levels early in the week and saw slight sell-offs. Bitcoin retested the support region below half of $21,000, but managed to confirm support at ~$20,500 and start a positive trend. Negative global financial markets also weighed on the euphoria and prices.After the FED in the U.S. raised the key interest rate by 75 basis points (0.75%), as most analysts were suggesting, the markets jumped in a jolt, which also caused digital assets to experience a positive trend reversal. As a result, Bitcoin climbed to $24,000 and continues to hover just under 10-15% above half of the support zone formed. Over the weekend, this trend did not continue, but largely held.


Bullish outlook: With positive global markets, Bitcoin could surpass $25,000.

Bearish outlook: Sell-offs and consequently a bearish market towards support zones could disrupt the positive market sentiment.