Bitcoin Joins Ethereum: Both Fall By Double Digits

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

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

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

Ethereum’s massive downturn comes in spite of a run of good news in recent weeks.

For the last few weeks, Ethereum’s price has been gently boosted by anticipation of its upcoming “merge” upgrade. The network is expected to transition from the energy-intensive proof-of-work (PoW) consensus mechanism, to the 99.95% greener proof-of-stake (PoS) mechanism. 

Bitcoin Miners Post Losses

On Monday, publicly traded Bitcoin mining company Bitfarms posted a $142 million loss. A loss amassed in the second quarter due to rising energy prices. 

During the quarter, they sold 3,357 Bitcoin for $69.3 million, to help pay off a loan from Mike Novogratz’s Galaxy Digital. By the end of June, the company held 3,144 BTC worth approximately $62 million. It said this in a U.S. Securities and Exchange Commission filing.

Bitfarms isn’t the only crypto mining company that’s posted losses recently. Last month, Argo Blockchain PLC became the most recent Bitcoin mining company to have sold more Bitcoin than it mined. More Bitcoin than it mined in a month. 

Data by Arcane Research revealed that publicly-traded Bitcoin miners, like Marathon Digital and Riot Blockchain, sold more Bitcoin than they mined back in May. This is 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 have negatively impacted the mining industry. 

Holdnaut And Celsius

On Tuesday, beleaguered Singaporean crypto lender Hodlnaut applied for judicial management. This they did in a bid to buy more time to recover from recent liquidity troubles. These troubles have led to a decision to freeze customer crypto withdrawals. 

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

By Friday, Holdnaut announced that it was cutting 80% of its staff, roughly 40 people, “to reduce the company’s expenditure.” The company is currently also fielding pending proceedings with the Singapore Attorney-General and the Singapore police force. 

On Wednesday, Celsius, got approval from a New York bankruptcy judge to sell Bitcoin. Those generated from its Celsius Mining subsidiary in order to pay back creditors. On July 14, a day after the parent company filed for bankruptcy. The Bitcoin mining operation also filed for bankruptcy.

The Fed Issues Crypto Bank Guidelines

On Tuesday, the United States Federal Reserve released new guidelines for crypto banks. While the actual 49-page ‘Final Guidance’ mentions the word “cryptocurrency” only once, the subtext clearly invokes crypto.

The guidelines give directions for “institutions offering new types of financial products or with novel charters” to attain so-called “master accounts,” a key financial status that allows for direct payments with, and access to, the Federal Reserve. All federally chartered banks possess a master 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 make “transactions easier for the consumer.” 

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