Market Wrap: Bitcoin Climbs Above $21K for First Time in a Week

Hi, I’m Jimmy He, here to take you through the day’s crypto market highlights and news.

Bitcoin (BTC) lifted above $21,000 for the first time in over a week and was up 7.2% over the past 24 hours in Thursday trading.

Most major altcoins also gained with Internet Computer’s ICP and Polygon’s MATIC leading the charts, both up over 10% for the same period. Ether (ETH), the second-largest cryptocurrency by market capitalization after bitcoin, rose 8.3%.

Crypto prices have correlated increasingly to equity markets, which also rose on Thursday, with the tech-focused Nasdaq jumping more than 2% and the S&P 500 and Dow Jones Industrial Average each climbing by more than a percentage point.

The highly anticipated Ethereum 2.0 upgrade and transition from proof-of-work to proof-of-stake moved a step closer on Wednesday when Ethereum’s Sepolia testnet successfully merged its PoW chain with its PoS chain, becoming the second of three public testnets to run through The Merge.

However, most stakers are “now firmly underwater” because of locked-up ether and price declines, market intelligence firm Glassnode reported.

To become a validator on Ethereum’s Beacon Chain, which launched in December 2020, investors had to deposit 32 ether into an Ethereum 2.0 contract with no withdrawal date.

The total ETH that has been deposited has now reached 12.98 million, with 62% of tokens (8.02 million) deposited before the market’s all-time high of $4,867 in November 2021. Ether has since declined approximately 75% to trade at around $1,240.

“With spot prices currently at $1,060, this means ETH 2.0 stakers are on average holding a loss of -55%,” Glassnode wrote. “If we compare this to the realized price for the entire ETH supply, 2.0 stakers are currently shouldering 36.5% larger losses compared to the general Ethereum market.”

After facing liquidity problems and halting customer withdrawals in mid-June, Celsius Network paid off a loan on the decentralized finance (DeFi) platform Maker, allowing the crypto lender to reclaim 21,962 wrapped bitcoins (WBTC), equating to about $440 million.

Celsius’s CEL token momentarily climbed to a high of 92 cents but has since slumped back to around 84 cents, up 0.1% in the last 24 hours. The token is down 81% since the start of 2022.

The loans on decentralized lending platforms such as Maker are generally overcollateralized, meaning the borrower has to put up more assets in value as a backing of the loan than the value of the loan itself. Repaying the loan made sense for Celsius because it attained the valuable collateral by paying back a fraction of its value, Krisztian Sandor reported.

This comes after crypto lender Voyager filed for Chapter 11 bankruptcy on Wednesday, becoming the second high-profile crypto firm to do so in July. As liquidity issues continue to plague crypto companies, lenders are forced to either acquire assets to repay customers or shut down altogether.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.