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August 10, 2022

Bitcoin holds above $20,000 as The Merge looms for Ethereum

By Simon Peters, cryptoasset analyst at multi-asset investment platform eToro


Bitcoin continues to hold above $20,000 having popped above $22,000 briefly last week – the first time since mid-June – as it continued to show signs of resilience.

The cryptoasset has been moving in this area for over a month now halting steep declines of earlier in the year. BTC is currently moving around $20,200 on the eToro platform.

Ether likewise has been moving between $1,000 and over $1,200 since the big falls of April-June, and is currently trading just above $1,100 on the eToro platform.

Eyes are firmly on ether at the moment as the Ethereum network merge moves closer. Major trials have run smoothly and the signs are looking good that it will soon take place. While it’s impossible to know what effect the move to a proof-of-stake network will have on the cryptoasset price, theoretically it is deflationary as it encourages holders to stake rather than sell their tokens.

Although wider cryptoasset market price levels are well below highs seen last year, performance is now normalising and the majority of tokens on eToro have exhibited more stability in the past few weeks.

The message for investors at the moment is to hold tight and keep watch of the market. We see regular institutional movement and ongoing growth of the sector as a key indicator that the game is not up. What’s important to remember however is that diversifying within the sector, as in any asset class, is essential to spread risk.


VCs on the hunt for crypto opportunities

VC firm Konvoy has launched a $150 million fund to look for blockchain-based gaming opportunities. The fund launch is a good example of the underlying interest in blockchain and crypto markets despite continued market adversity.

Konvoy is looking at quite a specific segment of the cryptosphere in gaming and blockchain but both are part of a considerable growing area which doesn’t lack for exciting innovations. Gaming is a huge industry and blockchain-based projects are a growing proportion of this.

We’ve seen examples of VC and other interest capital flow into funding crypto projects in recent weeks and months. While neither a drop in the ocean nor a market making proposal, it is clear evidence for investors that despite depressed market valuations there are still opportunities available for future investment in the sector.


Reddit launching NFTs

Popular digital discussion forum Reddit has launched NFT avatars and a marketplace to obtain them. While neither the first nor the last to enter the space, Reddit has a considerable user base and will likely look to build upon this as an entry point into more crypto tech for its platform.

It isn’t the leader in this regard but it is a positive indicator that the market is still there to be had. NFTs have had a rollercoaster ride since coming to real public prominence. There’s a big discussion to be had over the direction of the sector and the quality of some offerings, but this is ultimately not dissimilar from the early days of crypto, which is now much more developed and sophisticated, in terms of ideas and offerings.

With any emerging market there will be teething issues, but the ideas and innovations remain relevant and organisations such as Reddit are taking the opportunity to get involved frequently, which will see the space grow organically in the long-term.



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