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Bitget Hot Takes (September 19 - September 25)

Bitget Hot Takes is the exclusive weekly newsletter series by Bitget Academy, the 360-degree onboarding guide for all crypto enthusiasts. Bitget Hot Takes last week can be found here. Central Themes - The U.S. Federal Reserve (FED) raised interest rates by 0.75%. - Although the news is kind of priced in already, equities and Bitcoin still reacted negatively to this new rate hike. - BGB was the only one to end the week with green. - Ethereum price continued to drop after The Merge. - Market maker Wintermute hacked for US$160 million. - Walmart and Disney start to embrace NFTs. The Only One To End The Week With Green Markets are on an endless downward spiral post-rate hike, with the SP500 seeing the fifth consecutive week of losses and wiping out all its gains from 2021. Similarly, the global crypto market has lost its US$950 million cap since September 18, showing no signs of reclaiming this mark soon. Regardless of the market movements, BGB Holders were able to lock in a cumulative return of nearly 1.07 by Sunday, which translates to a 7% increase in returns for the last seven days. BGB experienced some turbulence until mid-week last week, but picked up the momentum since September 22 and gloriously ended the week with a profit compared to all others’ losses. BGB has, time after time, proved its ability to resist unfavourable market conditions, and even demonstrated its ability to thrive when the sentiment is extremely bearish. That alone is a decent reason to hold BGB as a hedge for your wealth. Unconvinced? Below are our BGB reports for the last months: BGB Sail: August Edition BGB Sail: July Edition BGB Sail: June Edition BGB Sail: May Edition Correction Will Hurt For the first time since the beginning of September, Bitcoin has three consecutive days of losses and an all-red weekend. It is possible that we may see another red day today, so pay attention to your positions consciously. BTC Price Chart Source: TradingView Sharing the fate with Bitcoin are ProShares’ Long Bitcoin Strategy ETF (BITO), Grayscale Bitcoin Trust (GBTC), and other pro-crypto funds and/or companies. Surprisingly, the biggest losses belong to the one and only ProShares’ BTCUSDT">Short Bitcoin Strategy ETF (BITI) at -68.75%. With the (highly possible) months of correction to come, Bitcoin mining can expect a harsh winter. Even though Riot Blockchain stocks (RIOT), who owns 0.032% of the total Bitcoin supply, experienced a 4.32% increase in value at the end of the week, it’s still not enough to compensate for losses of the week before. That is not to say that stock prices of another big mining firm, Marathon Digital Holdings (MARA), continued to slump further down (-1.27%) and its Texas-based data centre provider Compute North has recently filed for Chapter 11 bankruptcy. But it’s not all doom and gloom for Bitcoin miners: Icebreaker Finance launches a US$300 million lending pool on Maple Finance to support Bitcoin mining companies in North America and Australia. A key factor responsible for the bloodshed of the flagship cryptocurrency is rising levels of correlation between (1) Bitcoin and NASDAQ and (2) Bitcoin and bonds, which is currently at its peak within the one-year time frame. Source: Kaiko Analytics Meanwhile, data from Arcane Research demonstrates that Ethereum’s newly forked tokens (ETHW, ETF) have been performing way worse than Ethereum since The Merge. Even the notable ETC was trading with more losses than ETH. You heard it right - all are recording non-stop losses since September 16 (one day after Ethereum’s conversion to PoS), but ETH locked in the lowest level of losses compared to the other three. Source: Arcane Research And the whole crypto market was in shock when crypto market maker Wintermute announced an attack on its DeFi operation unit on September 20. The amount of stolen funds was revealed to be US$160 million, and the team is offering a 10% bounty for the hacker. The Wintermute team and its DeFi partners have confirmed the integrity of funds, and even deposited more funds into the associated pools for users who want to withdraw. What Is The Silver Lining(s)? Despite what’s yet to come, we can still trust in the wide adoption of crypto via NFT’s popularity. New big names to enter the space include Walmart and Disney. The retail giant Walmart, also considered to be an essential element of American culture, will soon provide DC Comic books that are linked to NFTs redeemable on the WAX blockchain. This move can significantly encourage businesses to test out their NFT strategy because it is now more ubiquitous than ever before. And talking about Disney… Previously on September 10, the conglomerate’s CEO publicly disclosed their interest in Metaverse and eventually put on a job description on LinkedIn for a Principal Counsel in Emerging Tech and NFTs. Expect the “Next Generation Storytelling Consumer Experiences” from The Walt Disney Company. And Governor of The Golden State vetoed the Assembly Bill 2269 by State Congressman Tim Grayson, which basically requires all crypto businesses to apply for an operating licence. As per an official statement by Gavin Newsom’s office, “a more flexible approach is needed [...] to address trends and mitigate consumer harm”, thereby allowing California to remain the important innovative hub of the U.S. The Latest Bitget News Since the introduction of the exciting Bitget Launchpool since early September, we have released a total of 10 yield farming pools available for all Bitget users! It’s important to note that we select only the most commonly traded tokens so that rewards are truly rewarding and ready-to-be-exchanged at any time! There are only 2 days left to join Bitget CHZ pool - are you IN yet? Bitget ABCs is the new program where you can request the listing of your favourite tokens and express your loyal support! Don’t forget to visit Bitget Spot Trading - we are charging 0% spot fees and even offering additional trading rewards for newly listed tokens! Get access to hundreds of innovation tokens, fan-based tokens, and of course crypto blue-chips at a net price or even discounted price thanks to our zero fee program and GroupCoin program! New Listings Spot Trading ETHWUSDT AMPLUSDT FETUSDT SWEATUSDT LINGUSDT Futures Trading BANDUSDT Futures Grid Trading MATICUSDTSOLUSDTXRPUSDTADAUSDT New Events Community AMA for Grid Trading, Join to Share 30,000 BGB Earn Up To $274 for Welcome Bonuses Zero Fee Spot Trading on Bitget! Guess Coin Price to Win BGB, Trade to Earn Another 20 BGB! US$10,000 In BGB To Be Shared - Simply Click Share! Receive $4,163 In Welcome Bonus! Get Up to 20$ Free in P2P and Spot Trading! Bitget x TI Crypto Exclusive Campaign Good Reads Funding Rate: Why Trading Crypto Is Revolutionary What Is The Crypto Fear Greed Index Margin Explained: Using Borrowed Funds Cardano Vasil Hard Fork Upgrade Macroeconomic Factors That Can Affect Crypto Prices Follow us for the latest updates: Twitter | Telegram | LinkedIn | Facebook | Instagram

Things you need to know about the Ethereum 'Merge'

Since the Ethereum's Merge is coming soon this August, let’s find out more about ‘The Merge’ - the long-awaited upgrade to the Ethereum blockchain. What is the Ethereum “Merge" (the Merge) and Why? Vitalik, since the beginning of Ethereum, announces that this protocol is currently an interim version and that there will be a version 2.0. This has been developed since the early days of Ethereum. However, we have really seen the beginnings of Ethereum 2.0 with the arrival of the Beacon Chain in late 2020. The Beacon Chain was the chain that will govern Ethereum during the transition to Proof-Of-Stake. From the end of 2020, it is possible to send 32 ETH within a smart-contract in order to become a validator of the ETH network in its PoS version. This Beacon Chain works today in parallel to the main chain which is used in PoW version to secure the network. That said, from "The Merge", it will be this Beacon Chain that will validate the blocks of the ETH network and therefore it will be from this version that Ethereum will go into Proof-of-Stake version. Even once this is done, there will still be several steps before arriving at the "final version" of ETH 2.0 but "The Merge" is going to be a great step forward since it will sign the end of the proof-of-work based protocol on which ETH was based since its creation. When will this Ethereum “Merge" update arrive? It's going to happen very soon. When we look at social media channels and follow influencers within the Ethereum Foundation, for example Tim Beiko who is one of the main ETH developers, we notice that he congratulates Uniswap in particular for already working on developing on the Kintsugi version (a testnet). We also saw Danny Ryan who tweeted "Yes, it's happening, Yes it's soon". Then, simply Joe Lubin who is one of the co-founders of Ethereum, said at the beginning of 2022: ETH 2.0 will arrive during Q2 2022 (so very soon), or at worst, it could be delayed for Q3 2022. So this means that ETH 2.0 can arrive during the next 3 months and at most in the next 6 months. What will happen to ETHs that are staked in the Beacon Chain smart-contract? For the moment these Ethereums are blocked since the end of 2020 because Vitalik Buterin had specified that it was possible to send 32 ETH in order to secure the Beacon Chain but that they would be released only after "The Merge". So for the earliest stakers, they have their ETH staked since late 2020, and at that time, ETH was valued less than 1,000$. They are currently sitted on a big profit and we can expect that some of them will cashout and take profits. This is without counting on the malice of Vitalik who has planned everything and has set up a mechanism to avoid this selling pressure. Here is a link to an article summarizing this idea. Only 4 validators will be able to unstaked their 32 ETH every 6.4 minutes (all eras). This represents about 900 validators per day. On average, this would mean that there are 28800 ETH that can be unstaked per day. Today, the trading volume of ETH is about 10 000 000 ETH/day and the maximum supply is about 116 million ETH. The number of ETH that can be unstaked per day represents 0.29% of the daily trading volume and 0.02% of the total supply. This is very small because these figures assume that validators will sell 100% of the ETHs they unstaked. This is not the most preferred scenario since among these validators, firstly, there may indeed be some who will want to exit but they may not want to sell 100% of the ETHs in their possession and secondly, this would mean that there are only exits and no entrants. There could very well be many entrants because for the moment many institutions have not taken part in the validation adventure because they were afraid of this "lock-up period". They did not take the risk of staking without the possibility of unstaking. All miners or part of them who mine ETH via PoS may also want to participate in the validation via staking. The difficulty bomb is an Ethereum feature that aims to increase the difficulty level of extracting new ethers and thus encourage miners to leave the network or pivot to the new chain. If the developers manage to complete The Merge by August, they won't have to delay the bomb, which will soon make it more difficult for ETH miners. Ethereum developers are currently running various tests to ensure the update goes smoothly. The last of these will take place on June 8 with the merging of the Ropsten testnet and the new Proof of Stake chain. Switching Ethereum to a new consensus algorithm is a technically complex task. It is even more complex for a network handling such a large volume of transactions, and moreover subject to increased competition from other so-called "Ethereum killer" blockchains, such as Solana or Avalanche. There is no room for error. Conclusion So, what does it mean for the crypto investors? There are potentially many people who will want to sell ETH at "The Merge" but also potentially new participants. Moreover, at the moment, the staking reward in ETH 2.0 version is about 4.5 to 5.1% annual interest but once "The Merge" will be effective, validators will not only earn income via ETH inflation as a reward, they will also earn the fee. This means that we will move to a potentially higher return than today. It is important to note that the post-merge ETH could have negative inflation. Currently, the ETH has an inflation of 4.1%. Since the version of ETH deployed in August that brought a "burn" of ETH via the "London Hard Fork" we have experienced 1.4% inflation. ETH inflation has a lot of probability to be significantly lower post-merge. It is therefore likely that Ethereum will gain in value post-merge when we know that deflationary character is the main strength of BTC. The layers 2 serve as a bridge until "The Merge". These, even after the developed version of ETH, are likely to be useful. To conclude, ETH could have more and more use once "The Merge" is over. Considering investing? Buy ETH now on Bitget! Disclaimer: The information provided in this article is not financial advice but for educational purposes only. Please do your own due diligence or consult a financial advisor before investing in any digital assets.