Driven by bitcoin and ether, cryptocurrencies are on the rise again

Posted 29Jul. 2022 at 13:29

Cryptocurrencies are taking over. After the storm that devastated the market in June, the main cryptocurrencies, bitcoin and ether in the lead, confirmed their rebound in July.

According to the specialized site CoinGecko, bitcoin took 28% over the month sold and was trading late Friday morning at 23,924 dollars. Ether saw its value increase by more than 50% over thirty days to reach 1,719 dollars. In the wake of the two largest cryptos by capitalization, the other major cryptos also erased or, at the very least, stabilized.

Optimists more investors

Overall, the sector is benefiting from renewed investor appetite for risky assets. Investors are also betting on the end, by 2023, of the tightening of US monetary policy which had cast a chill over the market in the second quarter.

This optimism is reinforced by the upcoming update of the Ethereum protocol on which ether is based. The Ethereum blockchain will indeed switch in September to the proof-by-stake protocol, a system much less energy-intensive than that of proof-by-work, used in particular by bitcoin.

A slow recovery

The cryptocurrency market is just recovering from the worst crash in its history. Initiated in May by the express tumble of the Terra, the crisis was then aggravated by the fall in tech stocks and the rise in rates in the United States. Since April, the total capitalization of cryptocurrencies has fallen by more than 50%, from 2.150 to 1.100 billion dollars, according to the site coinmarketcap.

Bitcoin, like Ethereum, remains very far from their highs. At the start of the year, the two cryptocurrencies were trading for almost double their price today.

Despite the recent upturn, the sector continues to suffer the consequences of the crash. In early July, cryptocurrency lender Voyager filed for bankruptcy after one of its biggest debtors, Singaporean hedge fund Three Arrows Capital, collapsed. In mid-July, Celcius, the cryptocurrency lending platform, declared bankruptcy. Coinbase, a leading crypto exchange, had to lay off 18% of its workforce in June.

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