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Weekly Wrap: Crypto markets respond to U.S. Fed rate hike

There’s always something exciting happening on the blockchain. Here are your go-to weekly highlights on everything crypto. 

Good days ahead for Bitcoin and Ethereum?

Despite the U.S. Federal Reserve’s increase of interest rates by 0.75%, a majority of the top cryptocurrencies rallied, including Bitcoin and Ethereum, which gained over 4% and 8%, respectively, in the weekly timeframes. And once again this month, significant price gains have helped cryptocurrencies regain a $1 trillion market cap. 


With crypto’s prices going against the usual trend correlated with Fed’s interest rate’s latest hikes, many are wondering what’s next. According to a new report from market intelligence firm Messari, the next target for Bitcoin would be matching gold’s market cap, which means there’s a “10x investment opportunity” in the long run. 


Messari’s report also predicted that Bitcoin would continue its market dominance throughout 2022, so there may not be any flippening event where Ethereum takes over Bitcoin. The “Crypto Theses for 2022” report says that Ethereum still has to tackle persistent scaling challenges and its Layer 1 competitors to emerge victorious. Ethereum’s overall success appears to be closely linked to that of Bitcoin. Messari indicated that Ethereum’s smart contract platform dominance, which slid from 80% to 60%, coincided with a decline in Bitcoin’s dominance, from 71% to 42% this year.  


Snacks

Stablecoin supply drops by over 18%  

Arcane Research published a new study on the supply data for major stablecoins like USDT, USDC, DAI, and others. In the face of rising inflation, the total stablecoin supply has dropped by over 18% over the last quarter. Arcane Research indicated that the overall stablecoin supply was above $180 billion in May 2022. By the end of the second quarter, that amount had dropped to $151.3 billion.

Uniswap to turn on the fee switch   

The Uniswap community approved to activate protocol fees. Trading fees on the decentralized exchange are usually shared with liquidity providers, but the activation of protocol fees means some of the revenue collected from fees would be distributed within the protocol, a move that could benefit Uniswap token holders. The latest development could explain why UNI has rallied by 22% this week, reaching a weekly high of $9.81. 


Market Moves

Ethereum reclaims $1,700

The much-awaited Ethereum mainnet upgrade, scheduled for September 2022, is slowly becoming a reality. On Tuesday, the network deployed its tenth shadow fork, about 26 hours ahead of schedule. In response to the new developments, Ethereum has climbed its way over $1,700, as the price rose over 8% on Friday. 

Solana reaches new milestone

Solana’s active validator count is close to 2,000, making the network more decentralized than its competitors. But almost half of the validators are located in U.S. and Germany. According to market Messari, if validators are concentrated in the same places, the blockchain becomes reliant on the regulations of those countries. Despite the market being down, Messari said that Solana’s position in the NFT sector remains strong and is now rising as an Ethereum challenger. Solana rose to $42.86 with over an 8% gain on Friday. 


Trending

Japanese crypto lobbyists want lower taxes

Japanese crypto lobbying organizations, Japan Cryptoasset Business Association (JCBA) and Japan Virtual and Crypto Assets Exchange Association (JVCEA) plan to move authorities to lower the tax rates on the local digital asset sector. If the law is passed, the regulation could encourage crypto-focused companies in Japan to remain in the country instead of shifting their business to other regions with laxer crypto tax laws.

U.S. to cut raxes on small crypto payments

A new bill has been proposed in the U.S. to make crypto transactions under $50 tax-free. If passed, crypto traders in the U.S. will not be required to report personal transactions below the threshold amount. The senators supporting the bill believed that the “Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”  

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