Ethereum’s value plummets as crypto loses $355B in just 3 days
Since 5 May, the combined market cap of the digital asset sector has dipped by 15%
- ETH's monthly losses currently stand at 22%.
- Binance has pledged AUD$710M (US$500M) to help Elon Musk with his highly publicised Twitter takeover.
- A new study claims that the NFT market will grow by more than 400% over the next 5 years or so.
Ethereum, the second-largest cryptocurrency by total market capitalisation, has seen its value plunge approximately 13% over the past week. At press time, ETH is trading at AUD$3,529.
The ongoing volatility seems to stem from the US Federal Reserve's decision to hike interest rates by 0.5% recently – its largest such adjustment in over 20 years. This was the second rate hike of 2022, with the central banking agency all set to initiate 5 more such adjustments over the next 7 odd months.
Despite these bleak financial indicators, crypto adoption seems to be rolling ahead as usual with popular cryptocurrency exchange Coinbase recently acquiring the world's first Bitcoin-backed loan from Goldman Sachs. The exact specifics of the deal – including the loan amount – were not specified, but Brett Tejpaul, head of Coinbase Institutional, noted that the move was an important step in terms of bridging the gap that currently exists between the world of "fiat and crypto".
Furthermore, ever since Tesla CEO Elon Musk made his intention to buy Twitter clear late last month, he has received support from a host of mainstream crypto entities. The purchase will apparently be backed by contributions from companies like Binance and Sequoia Capital Funds, which have pledged US$500M and US$800M, respectively.
NFT market set to flourish over the coming few years
While some pundits believe that the non-fungible token (NFT) space has saturated in recent months, some technical reports suggest otherwise. A recent study suggests that by the end of 2027, the total market capitalisation of this sector will balloon to US$13.6 billion, up nearly 450% from its current valuation of US$3 billion.
Some of the primary catalysts that will help spur the growth of the NFT market include increased investment within the metaverse as well as the entry of more recognisable players into the fray. Experts also believe that as NFTs continue to become more personalised, they will accrue more attention from investors across the world.
Utah all set to welcome crypto task force
After 3 years of careful deliberation, the governor of Utah, Spencer Fox announced that his state is all set to establish a crypto/blockchain task force that will oversee the state's various digital currency initiatives. The bill, which was finally given the green light late last month reads as follows:
"[The task force shall] develop and introduce recommendations regarding policy pertaining to the promotion in the state of the adoption of blockchain, financial technology, and digital innovation."
The announcement comes at a time when the United States Securities and Exchange Commission (SEC) revealed that it will be hiring an additional 20 personnel – including investigative staff attorneys, trial lawyers and fraud analysts – to help the US government bolster its existing crypto governance efforts.
Disclosure: The author owns a range of cryptocurrencies at the time of writing