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Polygon completes hard fork to boost network performance

  • Polygon announced the scheduled hard fork had succeeded on Tuesday, 17 January, 2023.
  • The software upgrades will help address the issue of gas-fee spikes and potentially disruptive chain reorganizations.
  • Polygon is looking at other technical upgrades such as zkEVM and parallelization as the team eyes further improvements to the network.

Polygon, the Web3 infrastructure platform built on Ethereum, has successfully completed its scheduled mainnet upgrade, according to an announcement from the team behind the blockchain project.

Upgrade to help boost Polygon performance

The proof-of-stake (PoS) upgrade is a hard fork that the community approved in a recent vote, with the implementation aimed at reducing gas fees spikes on the Ethereum scaling solution. With the hard fork it means that although the network could still see spiking gas fees during peak demand sessions, this will now more likely mirror Ethereum’s current gas dynamics.

According to the Polygon team, the upgrade will smooth out any gas fee spikes and allow for seamless interaction with the chain.

The software update is also meant to address chain reorganizations, or “reorgs”, which can impact transaction finality and be disruptive to the chain.

Polygon highlighted the above proposals in a post published on 12 January.

Alongside the completed hard fork that is set to boost network performance and predictability, there are longer-term targets still aimed at making the blockchain protocol ideal for a growing community of users. These will include technical upgrades such as parallelization and Polygon zkEVM being worked on.

Major Web3 projects such as Uniswap and Aave are on the Polygon PoS chain, along with thousands of other decentralised applications (dApps). The chain has registered more than 207 million unique addresses and processed over 2.3 billion transactions.

The post Polygon completes hard fork to boost network performance appeared first on CoinJournal.

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What to expect in crypto ahead of inflation report, as Bitcoin banks eight straight days of gains


Key Takeaways

  • Bitcoin has increased for eight straight days, now up 9.2% on the year
  • Period of low volatility in the crypto markets paired with softer inflation data has sent prices upward
  • Latest CPI report is out Thursday which will trigger volatility and is vitally important for the market following increased optimism over last month or so
  • Altcoins could move violently on the report, while Bitcoin will likely shake off its $18,000 mark if data comes in below or above expectation

 

Bitcoin has banked eight straight days of price rises, as the new year has kicked off assiduously for cryptocurrency investors.

Whereas 2022 brought nothing but pain and freefalling prices, 2023 has thus far been the exact opposite. Bitcoin is up above $18,000 and Ethereum close to $1,400, good for rises of 9.2% and 16.4% respectively year-to-date. Many altcoins are up even more.

Volatility has reduced in the crypto markets

The macro climate is pushing prices upward. I wrote a piece analysing the softer climate last week, but optimism has crept into the market that inflation may have peaked and that the possibility of a pivot from the Federal Reserve off its policy of heightened interest rates may be coming soon than previously anticipated.  

It should be noted that while this is a nice rally, it is hardly a violent breakout. Cryptocurrencies are notoriously volatile and there has actually been an unusual serenity that has washed over markets over the past couple of weeks.

A quick glance at the chart for the daily returns of Ethereum illustrates that there has been a perceptible fall in volatility.

Inflation data to be released Thursday

I write this on Thursday morning, with the all-important US inflation data to be released this afternoon. If we know anything by now, it is that inflation numbers rule the world. If there is anything in the current climate that will produce volatility, it is the CPI report.

As mentioned above, this relief rally has largely been predicated on softer inflation leading to the hope that the Federal Reserve will pivot off its high-interest-rate policy sooner than anticipated. Another positive inflation number would give further impetus to crypto prices. It is not hard to imagine Bitcoin pushing up towards $20,000 and Ethereum to $1,500 if the number comes in cooler than anticipated.

On the flip side, of course, is the potential for the number to disappoint investors. Following two straight months of positive inflation, a step back this afternoon would be a body blow for crypto, and it would not be a surprise to see it drop sharply as all the optimism of the last month gets released in an instant.

The inflation number is expected at 6.5%. This would be a decline from the prior month of 7.1%. Should the number come in at 6.7% or higher, this would represent a major disappointment and crypto will likely freefall. Do not be surprised to see Bitcoin down at $16,500 in this scenario.

The data will be released at 1:30 PM GMT (8:30 AM ET), and it is the last CPI report before the Federal Reserve’s February 1st interest rate decision.

Altcoins showing signs of life

However bad things have been for Bitcoin and Ethereum, the landscape has been a hell of a lot worse for altcoins. Below are the percentage returns in 2022 from the top 10 coins as of 1st January 2022.

As is standard, these coins are significantly more volatile, and trade like leveraged bets on Bitcoin. It follows that this year, the jumps have also been stronger than the number 1 crypto. 

Looking at the top 10 coins from Jan 1st this year, some of the returns have been seismic, albeit from a significantly lower base. Remember, a 90% drop followed by a 50% rise is still the same as an 85% drop from the original starting point. A simple math problem that many investors do not understand. Hence, the past couple of weeks have been positive, but this is still a space that has been absolutely ravaged by the bloodbath that was 2022, and it will take a very long time to recover from. 

Final thoughts

This is a pivotal week for the markets and it will be a true gauge of how far the battle against inflation has come. Central banks have been adamant that inflation is the number one priority, and the consequent interest rate policy has crushed risk assets over the last year.

Things are tough in the markets, but with a third straight month of OK inflation data, it could point toward a light at the end of the tunnel. Then again, the world is teetering on the edge of a recession as it is, and if inflation takes a step back, it will be a double whammy of high rates and still-persistent inflation. As always, risk assets will feel the pain. 

Crypto investors will just have to hope that the pivotal CPI number doesn’t dare tick up beyond 6.5%. 

The post What to expect in crypto ahead of inflation report, as Bitcoin banks eight straight days of gains appeared first on CoinJournal.

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Why are crypto prices rising? 2023 off to hot start


Key Takeaways

  • Crypto markets have jumped to the start the year off positive macro news
  • Next inflation reading is out on Thursday, which will cause further volatility
  • Fight against inflation has long way to go, with investors not out of woods yet
  • Solana has risen 65% since New Year’s Day, but fell drastically prior and problems remain

After what was, to put it mildly, a rather disappointing year in cryptocurrency in 2022, the new year has jumped out to a positive start.

Bitcoin, Ethereum and all their other friends got ravaged last year, but nine days into 2023 there is green on the board. Let’s look at why this is, and whether we will see more of the same, or if price action will reverse back to the 2022 pain.

Macro provides impetus for crypto run

The single biggest reason for the cryptocurrency jump this year is the same reason that pulled the entire space down last year: macro.

The stock market has had a positive start to the new year. This comes off the back of inflation readings around the globe coming in lower than expected. While there is still a hell of a long way to go in the battle against this rampant cost of living crisis, the latest data has given investors hope that central banks may pivot off their policy of high interest rates sooner than previously anticipated.

After a decade of low interest rates, the world transitioned to a new interest rate paradigm in 2022, as rates were hiked aggressively in response to the inflation crisis. This was aimed at reining in demand and ultimately spiralling prices. As a result, all risk assets peeled back, and there is nothing riskier than crypto. So, down the market went.

Solana decouples from market

Of course, while macro is clearly the big driver here, there still remains idiosyncratic risk and happenings in the crypto space. Look no further than last year, when three events (Luna, Celsius and FTX) caused large dropdowns and deviations from the stock market, which otherwise displayed extremely high correlation with Bitcoin.

To start the year, we have seen Solana streak out ahead of the crowd, printing a remarkable 65% return thus far, having opened the year at $10 and now trading at $16.50.

I wrote a piece last week diving deep on Solana, but suffice it to say the coin has big problems. Between repeated outages, has seen several big projects flee the blockchain and has also suffered as a result of its close ties with the disgraced Sam Bankman-Fired. The below chart shows that while this rebound seems large at 65%, it is still a drop in the ocean compared to the freefall it has experienced.  

This rise over the last week may be at least partially attributed to Bonk, the latest meme coin phenomenon which I also analysed last week. We know by now not to read too much into doggy tokens, but nonetheless, the rise has at least eased some of the pain for Solana investors.

What Bitcoin continue to rise?

As for the future, that is anyone’s guess. The next big day is Thursday, when the latest CPI figures are revealed. If inflation in the US comes in softer than expected, you can expect markets to rally upwards on renewed hope.

It really comes down to the same thing it has for the last year: the crypto markets will only meaningfully rebound once the Federal Reserve pivots away from its currently-hawkish interest rate policy.

In turn, the Fed maintains that rates will continue to rise as long as inflation is elevated. With the employment market still tight and core inflation remaining stubborn (the headline rate has partially fallen due to energy prices, whereas core inflation is typically the number that lawmakers focus on), there is still a long way to go.

Ultimately, 2023 in the crypto markets will likely be decided based on what happens with this tussle between the Fed and inflation. Until that much-fantasised-about pivot actually occurs though, it could remain a tough time for digital markets.

The post Why are crypto prices rising? 2023 off to hot start appeared first on CoinJournal.

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Lido price momentum accelerates; gets extremely overbought

  • Lido DAO price has been in a strong bullish trend in the past few days.

  • It has become the biggest DeFi protocol in the world.

  • It has a total value locked of more than $6.9 billion.

Lido DAO price has done well in 2023 as demand for liquid staking remained high. The LDO token soared to a high of $2.68, the highest point since August last year. It has jumped by more than 80% from the lowest point this year and by 365% from the lowest point in 2022.

Liquid staking demand rises

Lido DAO is a leading blockchain platform that has evolved into the biggest DeFi protocol in the world. It has a total value locked (TVL) of more than $6.5 billion, making it bigger than MakerDAO, which has a TVL of over $6.4 billion.  We wrote about this development here.

For starters, Lido is a major player in a small but fast-growing part of the blockchain industry. It operates a liquid staking platform for some of the leading blockchains like Ethereum, Solana, Polkadot, and Kusama. 

For starters, liquid staking is a modified version of staking that is usually more flexible in nature. For convectional staking, users need to lock their coins for a certain period, which is usually a month. Withdrawing funds in that period usually means that the user will lose their staking rewards.

Liquid staking is more flexible since users can withdraw their staked funds at any time. This happens since the users are given a staked token. In the case of Ethereum, they are given the Lido Staked ETH (stETH), which has a total market cap of over $4.4 billion. Lido Staked Solana (stSOL) has a market cap of over $18 million.

Lido DAO price has rallied because of the upcoming Shanghai upgrade on Ethereum’s network. The upgrade will make it possible for people to withdraw their staked tokens in Ethereum. They have staked these coins for a few months. Therefore, investors expect that Lido DAO will have more demand.

Lido DAO price prediction

LDO chart by TradingView

The daily chart shows that the LDO price has been in a strong bullish trend in the past few weeks. In this period, it has managed to move above the important resistance point at $1.8500, which was the highest point on November 4. It has moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved to the overbought level.

Therefore, the coin will likely continue rising in the coming weeks as buyers target the next key resistance level at $3. A drop below the key support point at $1.5 will invalidate the bullish view.

How to buy Lido DAO

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SEC vs Ripple verdict will have implications for Ethereum too

  • The SEC vs Ripple verdict is expected to come in 2023.

  • The implications will be significant for Ethereum too.

The SEC vs Ripple verdict will likely be the biggest crypto news of 2023. While no date has been set for the verdict, analysts expect that it will happen in the coming year. It is still too early to predict the outcome of the case, its implication will go beyond Ripple and XRP. It will have an impact on other cryptocurrencies, Ethereum in particular.

SEC vs Ripple: the basics

The Securities and Exchange Commission (SEC) filed charges against Ripple on December 20th 2020. In the lawsuit, the agency sued the company and its executive of conducting a $1.3 billion unregistered security offering in 2013.

It alleges that Ripple and its execs raised money by selling XRP to investors in the US and around the world. Also, its execs raised $600 million through token sales and failed to register them under the federal securities laws.

By doing that Ripple deprived investors of the required protections that happen when a company raises funds. They also lacked access to information that they were entitled to.

Ripple denies these allegations and argues that the SEC knew that XRP was not a financial security. It points to a speech made by William Hinman, a former SEC director, who stated that ETH was not a security. 

Implications bigger than Ripple

The biggest implication of the SEC vs Ripple verdict will be on Ripple itself. However, analysts believe that other cryptocurrencies like Ethereum will be impacted as well.

As you recall, Ethereum made a transition from a proof-of-work crypto into a proof-of-stake coin in 2022. By so-doing, it made it possible for people to stake the coin and earn returns. Staking is a process where people bond their tokens to a validator and then receive rewards every month.

In a statement after the merge, Gary Gensler, SECs chairman said that he believed that Ethereum was now financial security.

Therefore, if the SEC wins, it means that it will train its eyes on other cryptocurrencies, including ETH. It will use the arguments made in court to prove its case. 

A lawsuit against ETH and other platforms in its ecosystem will have a major implication on the coin. For one, many exchanges will delist it in the United States to remain in good books with the SEC. Many exchanges have already delisted XRP in their platforms.

In addition to Ethereum, the SEC will use its argument to go after other platforms that had token sales in the past few years.

How to buy Ripple

eToro

eToro is a global social investment brokerage company which offers over 75 cryptocurrencies to invest in. It offers crypto trading commission-free and users on the platform have the option to manually invest or socially invest. eToro even has a unique CopyTrader system which allows users to automatically copy the trades of popular investors.

Buy XRP with eToro today

OKX

OKX is a top cryptocurrency exchange which offers over 140 cryptocurrencies to invest in. OKX takes customer security very seriously, they store almost all of their clients‘ funds in cold storage, and the exchange is yet to be hacked. On top of this, the exchange offers very low fees and customers can even use their crypto as collateral for loans on the platform.

Buy XRP with OKX today

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