The latest news on cryptocurrencies, blockchain and Defi

After a week of interruption in the publication of this letter due to the author’s summer holidays, we returned to the beginning of August under a much less gloomy sky than our last posting. While the macroeconomic issues driving all markets have obviously not changed in the space of two weeks, it is clear that investors are beginning to believe in the interventionist success of central banks in their ability to slow the economy to curb inflation. Such a slowdown is indeed welcomed and gives confidence for positioning ahead of the next cycle.

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Indeed, while it is true that the US economy is technically now in recession following the release of gross domestic product (GDP) data showing declining growth for the second consecutive quarter, it cannot be said that the economy is in crisis. , at least for now. US employers added 372,000 jobs in June, suggesting there is still enough capital in the economy to expand businesses. Janet Yellen, US Treasury Secretary, also said that the labor market has lost a significant number of jobs in past times of recession, which is not currently the case. Of course, she said, the economy is experiencing a “significant slowdown in growth”, but there are also “great forces” playing alongside you.

Immediately after our last communication, we learned that Tesla had sold 75% of its cash in bitcoin. If the announcement of this investment once caused prices to explode, the announcement of the sale was rather irrelevant. Despite a temporary decline, bitcoin found its share of buyers at the same levels as in recent weeks to quickly stabilize. We won’t be sorry for the increasingly subdued effects of Musk’s comments on the cryptocurrency market.

We were talking to you two weeks ago about the importance of the 200-week moving average (red line) for bitcoin and how the close above after breaking through has always led to a subsequent bull run. We thought we were close then, but that penultimate week of July ended up closing just below this indicator. However, the week ending Sunday managed to close north of this line, giving hope that it will now serve as strong support for the future. We can see that the path looks open for a bullish push to around $ 26,500 where the 200-week EMA is (yellow line).

Also note that July was the best month of 2022 for bitcoin. It was the same for Ether, with higher returns for the latter.

Starting next Monday, Michael Saylor will no longer be CEO of MicroStrategy. The company that recorded a heavy balance sheet loss in 2And quarter with its bitcoin treasury will now hand over this role to the company’s current president, Phong Le. However, don’t think this is a departure from the company for Saylor. On the contrary, the latter says he welcomes this move to his future position as executive director, which will allow him to dedicate even more time to the company’s bitcoin and crypto treasury. “I will remain a company official and chairman of the board while serving as chairman of the investment committee and leading our bitcoin acquisition strategy,” Saylor said during a conference call on the company’s second quarter 2022 results Tuesday. “I focus on advocating and educating bitcoin, as with the Bitcoin Mining Council, and on my role as spokesperson and envoy for the global bitcoin community.”

This is reminiscent of the recent words of Jack Dorsey, co-founder of Twitter and Square, who admits to making bitcoin adoption his top priority. “Bitcoin changes absolutely everything. I don’t think there’s anything more important in my life to work on, ”he said recently.

Why not take this opportunity to remember all the resilience of the blockchain, being bitcoin the monetary network with the operating time (time) the highest and most constant. It is its decentralization that explains it vis-à-vis centralized payment systems. It has been calculated that the network has an access availability of 99.987%. The last operational shutdown lasted 6.5 hours 3423 days ago, or about 9.3 years. In short, bitcoin has been offering for almost 10 years the possibility of trading anywhere in the world, without any intermediary, at negligible costs, without the slightest downtime. There is no financial system in the world that comes close to such a feat. This is another demonstration of the revolution brought about by the blockchain.

Speaking of blockchain, that of the Ethereum network is really approaching a crucial turning point in its existence. The final Ethereum Testnet merger is scheduled for early August. “Goerli” will be the third and final testnet of the network before the chain moves to proof-of-stake, scheduled for mid-September. Between 6 and 12 August, the Goerli test network is expected to merge with Prater, its associated coordination chain. The coordination chain (Headlight chain) main is the proof-of-stake version of Ethereum that has been running alongside the current Ethereum proof-of-work network since December 2020. The last two of these tests were successful.

Recall that the 2.0 chain eliminates the need for miners. Instead, validators, which can be anyone, as long as they promise at least 32 ETH or join a common pool of validators, will ensure network security by blocking the network’s cryptocurrency. Ethereum’s energy efficiency will be improved by around 99%, according to the Ethereum Foundation. The bottom line, and what some investors and analysts are currently so optimistic about, is that this transition has inherent reasons for leading to a substantial price increase. Indeed, by requiring the blocking of the ETH currently in circulation to issue new ETH, the process could have a deflationary effect on the cryptocurrency. If the growth in the supply of ETH can be slowed while the demand for the cryptocurrency remains high, this can have a positive impact on its price. In any case, this is the opinion of speculators stocking up on Ether and taking advantage of its outperformance against bitcoin. This is also the case with the Rivemont crypto fund.

As proof of the enthusiasm, the domain registrations of the Ethereum Name Service they are reaching an all-time high as the merger approaches. Over 1.8 million ENS domain names have been registered, and adoption by non-English-speaking communities is on the rise.

Is this migration an end to the network? Ethereum creator Vitalik Buterin reminds us that this is far from true. The merger is just a development phase leading the network to 55% completion, he said at an Ethereum conference in France in late July. After “merging”, Ethereum will undergo further updates which he calls “surge”, “verge”, “purge” and “splurge”. While the names may sound cartoonish, these steps are actually key parts of Ethereum’s downsizing, cleansing, and evolution, Buterin said.

The “surge” refers to the addition of the fragmentation of Ethereum, a scalability solution that will enable cost-effective Tier 2 solutions, reducing costs by rollup o bulk transactions and to make it easier for users to operate the nodes that protect the Ethereum network. ETH can only process 20 transactions per second at this time. After this future step, we are talking about 100,000 second transactions.

The “stick” will implement what Buterin calls “Verkle trees”, which represent a type of mathematical proof. These technical improvements will allow users to become network validators without having to store large amounts of data on their machines. According to Buterin, it is this step that will allow for true decentralization.

The “purge” will simply try to reduce the amount of space you need to have on your hard drive by trying to simplify the Ethereum protocol over time and not requiring nodes to archive their history.

The “madness”, finally? A much less technical step. “All the rest of the fun stuff,” Buterin explains with a laugh. In short, everything that the network can allow, including what perhaps has not even been thought of yet.

The fund’s capital has been fully exposed in the past few weeks. Our positions in ETH, MATIC and UNI generated a higher return than bitcoin for the period. Note that the fund has a position in SAND which has been relatively stable since our entry.

This article was offered to you by Fonds Rivemont. The Rivemont cryptocurrency fund is the first and only actively managed cryptocurrency fund in Canada. Suitable for RRSP and TFSA. Accredited investors can find out more here.

Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..

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