ethereum: Crypto week at a glance: Ethereum continues to struggle as interest rate hike haunts

Following the Fed’s 75bps print, volatility increased and caused liquidation on both sides of the book before selling off to a weekly low of $1,220. Subsequently, the price found some relief along with an increase in long open interest. Within a week, the closing price had reversed again, indicating underlying weakness in the market. ETH ended the week at $1,295 and returned -3.01% WoW.

Ahead of Wednesday’s FOMC, ETH/BTC showed strength, jumping over 4% on Tuesday afternoon.

After the Ethereum merger, there was a significant increase in user contract conversations. Historically, such behavior has indicated a growth in activity on the Ethereum network that goes beyond simple token transfers. Concerns about network instability may have motivated participants to stay on the sidelines until the event was successful.

After the successful merger was confirmed, along with the cancellation of any technical issues, activity skyrocketed in the following days. Interestingly, increased volumes persisted throughout the week, particularly in the DeFi and NFT sectors.

DEFI: US lawmakers have proposed a bill to ban algorithmic stablecoins, according to an article published by Bloomberg. Specifically, the bill would make it illegal to create “endogenously secured stablecoins” – those secured by a token created by the same issuer; for example, Terra’s UST support with LUNA. While we do not have information on how this proposed ban will be enforced, we believe that it is likely that US regulated exchanges will not list or use these tokens. Innovation: Zilliqa, a layer 1 blockchain, has announced a prototype of its web3 gaming console that will allow individuals to play NFT-based games directly without relying on centralized authorities. This console will be the first Web3 based console and will face competition from existing industry giants such as Sony and Microsoft. It seeks to allow individuals to mine native Zilliqa tokens while playing on console. In addition, the web3 game console will have a built-in wallet and first-party games developed by Zilliqa.

Altcoins: As part of its aggressive blockchain expansion, Tether launched USDT on Polkadot. The announcement comes weeks after USDT launched on the NEAR protocol – further proof of the blockchain’s stake. Unlike bridge-based versions of stablecoins, each native USDT token on Polkadot issued by Tether will be redeemable for $1. As a result, developers will gain access to a stable cryptocurrency that is protected by centralized authorities. In particular, USDT will be available on all Polkadot chains. Accordingly, we believe that stablecoin is likely to be widely used in the layer 0 network due to the need for a secure token after Acala’s aUSD depegging.

Terra Class (LUNC): 51% up

Quantity (QNT): 24% up

Reserve rights (RSR): 23% up

TerraClassicUSD (USTC): Up 13%

Helium (HNT): 12% up

Top 5 Losers of the Week (as of 11:00 AM IST 2nd October 2022)

Celsius (CEL): down 12%

Chiliz (CHZ): down 11%

Lido DAO (LDO): Down 10%

Cosmos (ATOM): Down 8%

Hedera (HBAR): down 7%

Note: The study only includes the top-100 cryptocurrencies in terms of market capitalization listed on the data source, i.e. Coinmarketcap.

(The author, Sathvik Vishwanath, is the co-founder and CEO, Unocoin)