15 Sep 2022

The Friday Focus: Issue 51

Welcome to our Friday newsletter - Our weekly crypto news summary, separating the signal from the noise.
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Weekly happenings in the crypto industry (Sep 9th - Sep 16th)
The biggest crypto event in several years occurred this week, as Ethereum activated "the merge" and shifted its consensus algorithm from proof-of-work to proof-of-stake. This transition has significant implications for Ethereum and the rest of the crypto ecosystem. Ethereum proponents celebrate the change as it will reduce Ethereum's energy consumption and pave the way for the upcoming sharding upgrade to increase its scalability.Still, "the merge" may bring increased regulatory and censorship risks for Ethereum, as SEC Chair Gary Gensler stated that proof-of-stake cryptocurrencies might become classified as securities. At the same time, advocates of Bitcoin's consensus mechanism proof-of-work have long warned about the censorship risks of proof-of-stake. "The merge" could also lead to increased scrutiny about Bitcoin's energy consumption, and Greenpeace has already intensified its anti-Bitcoin marketing campaign.We see lots of happenings on the regulatory front this week. The EU will soon finish the text for its MiCA regulation framework, which the Binance CEO expects to become a global standard. In Canada, the Conservative Party elected the pro-Bitcoin leader Pierre Poilievre as party head and, by extension, the main opponent of current prime minister Justin Trudeau in the next election. Trudeau answered by attacking Poilievre for recommending Canadians to use bitcoin to opt out of inflation.Even though the bear market is ravaging, the institutions keep diving into crypto. The traditional finance giants Charles Schwab, Citadel, and Fidelity plan to launch a crypto exchange. Fidelity, which is already deep into crypto, also plans to offer bitcoin trading to retail clients on its brokerage platform. MicroStrategy announced it could raise up to $500M to buy even more bitcoin.Mergers and acquisitions are being canceled, and not everyone is happy with that. Bolt axed its $1.5B deal to buy crypto infrastructure provider Wyre, and crypto custody firm BitGo filed a $100M lawsuit against Galaxy Digital for breaching their merger agreement. Meanwhile, FTX Ventures buys a 30% stake in Anthony Scaramucci's SkyBridge Capital.The cleanup of the summer's crypto implosions is not finished. The South Korean authorities are on the hunt for Terra founder Do Kwon, issuing an arrest warrant and planning to invalidate his passport. FTX continues scavenging bankruptcy estates and is now closing in on buying crypto lender Voyager Digital's assets.Crypto miners keep struggling due to a combination of the falling bitcoin price and the bitcoin mining difficulty reaching an all-time high. In addition, Ethereum’s transition to proof-of-stake has led to a demise of the demise of the billion dollar ether mining industry. The problematic situation in the mining industry will likely lead to increasing mergers and acquisition activity, and bitcoin miner CleanSpark has already announced two acquisitions.If you haven’t already signed up, click here and subscribe to receive this newsletter in your inbox every Friday.
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