Why Crypto appeared on Friday

What happened

Cryptocurrency values ​​jumped again early Friday morning before declining before the weekend. Overall, this week has been positive for cryptocurrencies, and although there is chaos, there seems to be more security than there was just a week ago.

Solana (SUN 2.98%) was up 4.1% in the last 24 hours from kl. 15:00 ET, and from Wednesday’s lowest level it is up over 20%. Polkadot (DOT 2.51%) is up 2.7% on the last day and 15% since reaching a low earlier this week. XRP (XRP 1.64%) was up almost double digits early this morning and is now up 1% today and 8.8% from its lowest this week.

So what

Developer Tim Beiko has suggested September 19 as the preliminary date for “The Merge” Ethereum (ETH 6.18%) which will change the consensus mechanism from proof of work to proof of effort. There have been several tests and years of development that go into this change, and the hope is that transactions per second will increase and the cost of transactions will decrease after The Merge. At least right now we have a target date in mind.

The liquidation of Three Arrows Capital continues to be full of chaos, and liquidator Teneo is hiring Singapore-based law firm WongPartnership to help gain access to the hedge fund’s assets in the region. They also hope to sue co-founders Su Zhu and Kyle Davies, who were missing after their fund collapsed.

DeFiance Capital, a crypto hedge fund, said it had been “significantly affected” by the closure of Three Arrows Capital announced in June. This may be another company facing financial problems when Three Arrows Capital’s risk comes to light.

On the regulatory front, SEC leader Gary Gensler said the agency is considering exempting cryptocurrencies from some security laws, hoping to ease the regulatory burden on some firms. Regulators have been struggling with how to deal with cryptocurrencies for years, and some solid rules will be welcomed by the industry, but we are not getting them yet.

What now

The financial downturn from several insolvencies and bankruptcies continues to work through the crypto industry, and it will probably take more time. But work to build and improve the blockchain continues, and we’ll see it with Ethereum this week. If The Merge goes as hoped in September, it could be very bullish for crypto in general.

Investors will also look at the regulatory markets. Crypto has been in regulatory limbo for years, but both the EU and the US seem interested in putting in place rules that will reduce the risk to consumers and allow innovation to flourish. There may be some urgency in the United States with an election in November, so lobbyists are busy making legislation for the industry. But it may take a while before it really affects the innovations built on the blockchain.