Crypto Market Declines After Fed Chair’s Statement

The crypto market had a relatively calm week until Friday, when the leading cryptocurrency fell by 4 percent within 24 hours.

The price drop was triggered by statements from Federal Reserve Chair Jerome Powell in Jackson Hole that the Fed would continue to raise interest rates as long as necessary to combat inflation. The comments also affected stocks, not just crypto.

As the weekend begins, all 10 largest cryptocurrencies by market capitalization show a net loss over the past seven days, except for Cardano, which announced a hard fork next month. Bitcoin fell by 5 percent last week, Ethereum by 6, Solana by 10, and Dogecoin by 8 percent.

Ethereum supporters still hold high hopes that the upcoming merge, or transition to proof-of-stake, will cause a rise in Ether. However, last week, the amount of Ether deposits in the beacon chain reached an all-time low, according to data from Dune Analytics.

The beacon chain is a blockchain that coordinates the network of Ethereum stakers. It has been running in parallel with Ethereum’s main network since its introduction in 2020. When Ethereum completes its upcoming major network overhaul next month, the main network will be merged with the beacon chain to fully create a unique proof-of-stake Ethereum blockchain.

After Ethereum transitions to the proof-of-stake consensus protocol, the network will be better prepared for further upgrades that promise speed, availability, and scalability.

Major Crypto News Last Week

General inertia across all markets this week reflected in the news cycle. It was a rather slow week in terms of crypto adoption or regulation.

The Australian Treasury stated in a press release on Monday that it has a comprehensive plan to establish a crypto regulatory framework based on market research, which it claims will be better than ‘anywhere else in the world’.

Australia will begin working on ‘token mapping’ this year, which they say will help identify ways to regulate crypto assets and related services. Once preparations are complete, the Treasury stated it will have a timeline for legislative and regulatory changes. The Australian Treasury also announced that it will soon publish a consultation paper on token mapping.

On Tuesday, Coinbase CEO Brian Armstrong admitted to CNBC that the company is still feeling the effects of the crypto winter. Coinbase laid off 18 percent of its staff earlier this year in an attempt to cut costs in a bear market that could last 12 to 18 months or longer.

According to Armstrong, 18 percent of Coinbase’s current revenue comes from subscriptions and services. Coinbase currently offers Coinbase Cloud, a suite of blockchain product development services, and Coinbase One, a service that provides higher-level customer support and other benefits.

Meanwhile, U.S. investors waiting for a Bitcoin ETF that must be approved by the SEC will have to wait a bit longer after the SEC postponed its decision on VanEck’s ETF application for another 45 days. This means the agency has until October 11 to make a decision or initiate a process to determine whether to approve the proposed rule change.

Finally, we received confirmation of the Ethereum merge date, which could potentially happen sooner than expected. According to a post from the Ethereum Foundation on Wednesday, the network overhaul will now be fully completed between September 10 and 20. Ethereum core developers on Twitter were even more specific, announcing September 15.

After eight years of waiting, it is truly just around the corner.