Cryptos finally get some positive publicity, sparking gains over the weekend
Over the past few months, the cryptocurrency sector has been plagued with headlines of huge corporations going insolvent and losing their investor's funds. Such as Three Arrows Capital, a Singapore-based hedge fund that held a huge presence in the crypto space going insolvent while still in substantial debt.
Then there is the collapse of Terra’s Luna, which was among the top three stable coins prior to its death spiral. Although the collapse was due to its algorithmic mechanism that was in charge of keeping it pegged at a 1 to 1 ratio with the U.S. dollar. Tether and USDC keep their peg in a different manner and actually have reserves backing their coins.
Other large institutions fell to a similar fate when their business model of paying huge yields on Bitcoin and other cryptos proved unsustainable in an extended bear market leading Celsius, Voyager, and others to halt withdrawals from their platforms due to not having the capital needed to reimburse their over-leveraged balance sheets. But help from the regulators in Washington might change both investor confidence and safeguard investor capital in the future.
Just recently the head of the SEC, Gary Gensler announced that he would be willing to help companies in a sector he has called “the wild west” of finance. Just like in Dancing with Wolves the frontier will soon be colonized and anyone involved in the sector is Kevin Costner basically, and could be glimpsing the last days of a true untamed and wild financial frontier.
"There’s a potential path forward," SEC chair Gary Gensler said during an interview with Yahoo Finance in comments that point to how the SEC could work with the crypto industry going forward and adding the agency has the authority to give exemptions to certain regulatory and disclosure requirements. "I’ve said to the industry, to the lending platforms, to the trading platforms: 'Come in, talk to us.'”
Another headline that has ignited bullish sentiment amongst traders is the timeline tweeted by an Ethereum insider on Twitter last week.
Since this Tweet Ethereum has shot up by 40% in less than a week, climbing from just above $1,000 on July 13th to nearly $1,500 as of 6 PM ET. Bitcoin has risen by 10% in the same time period. The merge to PoS has got to be the most anticipated event in crypto and has been for well over a year. The news of the merge possibly being completed by the week of September 19th has given Ethereum the shot in the arm that it needed and could bring about an end to the crypto winter currently underway.
It is worth noting that while BTC has yet to challenge its 50-day or 200-week moving averages, ETH has successfully taken out resistance at its own 50-day SMA signaling that ETH may have the greatest potential for gains in the upcoming weeks and months.
