This week in coins: Bitcoin and Ethereum fall by double digits

It was a very red week for crypto, with most leading cryptocurrencies weakening in the seven days that heavyweights like Bitcoin and Ethereum posted double-digit percentage losses by the weekend.

Bitcoin is currently down 13% and is trading at $21,309, according to data from CoinMarketCap.

Ethereum, the world’s second largest cryptocurrency by market capitalization, fell almost 18% to reach $1,635 at the time of writing.

Ethereum’s massive decline comes despite a string of good news in recent weeks.

In recent weeks, Ethereum’s price has been cautiously boosted by anticipation of its upcoming “merger” upgrade, when the network is expected to transition from the energy-intensive proof-of-work (PoW) consensus mechanism, to the 99.95% greener proof of effort (PoS) mechanism.

In a Wednesday note to investors, banking giant JPMorgan said Ethereum’s merger will be good for Coinbase. The crypto exchange has a market share of 15% of Ethereum’s assets and offers an Ethereum staking service for institutions. JPMorgan expects that these will give the exchange a competitive advantage after the merger.

In another bullish sign for the network, Ethereum Name Service (ENS) registrations have doubled the last four months. The news reflects a greater demand for .ENS domain names, which are a more manageable alternative to the string of random numbers and letters that typically make up a crypto wallet.

Almost all leading cryptocurrencies enter this weekend roughly 20% down from last. Solana fell 21% to $36, Polka dot fell by 22% and is currently trading at $7.42, Cardano fell 19% to 46 cents, Avalanche shrank 23% to $23, Polygon fell 21% to 80 cents, Uniswap fell 21% to $7.18, and Ethereum Classic fell 24% to $34.

Bitcoin miners post losses

On Monday, publicly traded Bitcoin mining company Bitfarms released a 142 million dollars in losses in the second quarter due to rising energy prices.

During the quarter, the Quebec-based company sold 3,357 Bitcoin for $69.3 million, to pay off a loan from Mike Novogratz’s Galaxy Digital. As of the end of June, the company had 3,144 BTC worth about $62 million, it said in one US Securities and Exchange Commission filing.

Bitfarms is not the only crypto mining company to have suffered losses recently. Last month, Argo Blockchain PLC became the latest Bitcoin mining company to sell more Bitcoin than was mined in a month. As of the second week of July, it had an outstanding balance of $22 million on a Bitcoin-backed Galaxy Digital loan.

Data from Arcane Research revealed that IPOs Bitcoin miners, such as Marathon Digital and Riot Blockchain, sold more Bitcoin than they mined back in May – a huge change from the first four months of the year, when miners sold just 30% of their earnings.

The recent combination of rising energy prices and a crypto bear market has negatively impacted the mining industry.

Holdnaut and Celsius

On Tuesday, Singaporean crypto lender Hodlnaut besieged used to legal management in an attempt to buy more time to recover from recent liquidity problems, which a fortnight ago led to a decision to freeze customer crypto withdrawals.

The application, which was officially submitted on August 13, prevents the firm from having to sell its assets to cover any shortfalls. It will also ensure that an independent third party replaces Hodlnaut’s directors to manage the company and oversee affairs, while legal claims against the firm are temporarily halted.

By Friday, Holdnaut announced that it was cut 80% of employees, about 40 people, “to reduce the company’s expenses.” The company is also currently involved in an ongoing case with Singapore’s Attorney-General and the Singapore Police.

On Wednesday, Celsius, another victim of the latest wave of bankruptcies, received approval from a bankruptcy judge in New York to sell Bitcoin generated from the Celsius Mining subsidiary to repay creditors. On July 14, a day after the parent company filed for bankruptcy, the Bitcoin mining operation also filed for bankruptcy.

At the start of bankruptcy proceedings in July, Celsius received approval to use 5 million dollars to launch Celsius Mining, a move that drew criticism from the US Department of Justice and the creditors’ committee, although the latter has since dropped its objections.

Fed issues guidelines for crypto banks

On Tuesday, the US central bank announced new guidelines for crypto banks. While the actual 49-page ‘Final Guidance’ mentions the word “cryptocurrency” only once, the subtitle clearly invokes crypto.

The guidelines provide instructions for “institutions that offer new types of financial products or with new charters” to be granted so-called “master accounts,” an important financial status that allows for direct payments with and access to the Federal Reserve. All federally chartered banks have a general account.

Luis Carlos Reyes, the Director of Colombia’s Tax and Customs Agency, DIAN, told Semana magazine on Monday that the South American nation’s new government would look to create “a digital currency” that would “transactions easier for the consumer.”

Many took Reyes’ words as a hint that a central bank digital currency version of the Colombian peso may be in the works.