It’s time for Ether options

Good morning! Welcome to The Daily Moon. Remember the Solana-based wallet hack from earlier this month where millions were lost? In an attempt to prevent more scams, Solana-based wallet provider Phantom has a new feature to remove spam NFTs. It’s as easy as a Burn Token tab in the wallet. Watch ‘em burn. It’s Friday, what you doing this weekend?

The markets were a mixed bag on Thursday. Bitcoin was down slightly and Ethereum was up. Nasdaq was down in early trade. Back home, the Sensex rose for the fourth consecutive session and Nifty closed above 17,900. Some banking stocks were up but the market was dragged down by IT and pharma.

The Short March To Merge

We know you must be tired of everyone telling you this, but we’ll say it again. The Merge of Ethereum is going to be massive. And not just for the blockchain, but for the entire ecosystem. Sure, there are (valid) doubts and unknowns, but things are looking good for Ether (ETH) already.

What’s up?

Ether options, for one. Though in circulation for a shorter time than BTC options, Ether options have been on an uptrend since July, when the news of the Merge broke. For the first time, Ether options are trailing at 100% recovery compared to bitcoin, which is trailing at 70%. The market is abuzz, ETH has risen over 50% since the Merge was confirmed in July.

What changes, what doesn’t?

With a tentative September 15 deadline, the Merge is now less than a month away. There are misconceptions and rumours about the changes it is likely to bring.

1. It is still early to say for sure how the price of ETH will change. But for users, staking ETH post Merge will carry lesser risk. It will remove the need for financial engineering projects, and the entire market for DeFi will become more mature, according to the head economist at ConsenSys.

2. ETH’s rally has the ecosystem excited, but there are experts who believe it is short-lived. The “anxiety due to concerns of The Merge not working as expected” will kick in at some point.

3. ETH, and the larger crypto market has been on a downtrend the past four days. Though it’s tempting to read into this as the euphoria for the Merge dying down, there are other reasons that are impacting ETH.

Rate Hikes Are Coming (Again)

The Federal Open Market Committee (FOMC) released the minutes of its July meeting. A further rate hike is coming, they show, but nowhere near the 75 basis point hike in July.

What was in it for crypto?

There was some commentary on digital assets, including stablecoins. Noting these were subject to vulnerabilities, the minutes asked for a “robust supervisory and regulatory framework” for the industry. Members acknowledged the rising importance of digital assets and their rising “interconnectedness with other segments of the financial system”.

What moved?

There was some movement downwards. Bitcoin was down slightly post the news, and fell 1% in the 24-hour period. There is some optimism from the minutes hinting that the pace of rate hikes could slow down in the coming months.

BTC Sell Off May Hit Pause

Experts suggest that we may see a slowdown in the sale of Bitcoin. Finally. Miners may stop dumping the BTC they mint and the ones they have stashed away. There are a few reasons why:

1. Inflation is down, gas prices are down and even though it’s not as lucrative as it once was, it is a good time to hold.

2. The large sell off has put these mining companies in a slightly better position than they were by giving them the liquidity they needed.

3. With positive economic news and the merge on the horizon, there is indication that the BTC price may start climbing and you always buy low and sell high.

How did we get here?

A quick roundup for those who are new. Electricity costs have been going up, mining became expensive. The Terra collapse bankrupted a few lenders, which led to panic. The dropping prices and the high costs made mining a loss-making business. At its sell-off peak, public miners were selling 400% of the BTC they were minting.

Fed’s Alt CBDC

The Fed is trying to make the concept of the CBDC in the US redundant. Sort of. It’s going to launch an instrument called FedNow. It is a service that will give customers and financial institutions an instrument that will compete with existing payment providers. It will enable speedy transactions and almost real time settlement. This almost completely reduces the need for a CBDC or a stablecoin. It’s no longer a plan either. The Fed has been working on this instrument since mid-2019 and will release it to the wider world in 2023.

However, the Fed hasn’t ruled out that FedNow and a CBDC could function together. Earlier this year, the institution had released a report on a Fed-backed altcoin.

And that’s it for today. If this email was forwarded to you, please consider subscribing. It’s free. We’ll never show you an ad or charge you for this. We swear.

Who are we? There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our promise. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more.