CoinLoan Weekly: Continued gains, best month of 2022, retailers’ enthusiasm
BTC’s 7-day low came early — on Tuesday, July 26, it slid to $20,783.39. Subsequently, the coin held above $23,000 for four days in a row until dipping in the late hours of Monday, August 1. On Saturday, July 30, the price peaked out at $24,581.15.
This jump lifted The Fear & Greed Index to 42 for the first time since early April. BTC’s correlation with equities tightened — on Thursday, July 28, it rose despite the new data from the US Commerce Department, which reported a GDP decline for the second consecutive quarter. In total, Bitcoin gained almost 27% in July.
As of this writing, BTC is changing hands at $22,855.35, with a 24-hour slide of -2.4% and a 7-day gain of 7.2%.
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ETH remained on a similar trajectory throughout the week, as it rebounded from Tuesday’s low of $1,367.93 (July 26). On Friday, July 29, ETH rose to $1,759.50, its 7-day high. The coin stayed above $1,600 for five consecutive days.
The enthusiasm about the Merge has helped ETH grow for four weeks straight. On Tuesday, July 27, Ethereum’s tenth shadow fork went live, bringing it closer to the upgrade. The transition to Proof-of-Stake, now scheduled for mid-September, is likely to have a deflationary effect.
As of now, ETH is trading at $1,579.52, with a 24-hour drop of -6.8% and a 7-day gain of 8.9%.
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For XRP, Tuesday’s low ($0.326516 on July 26) was followed by four days of trading above $0.36. Strong demand at lower levels helped the bulls push the price up. On Saturday, July 30, the token soared to a 7-day high of $0.405198.
On Monday, August 1, XRP dipped by 3.4% due to the release of 1 billion tokens from three escrow accounts. However, this factor was secondary to BTC’s failure to hold above $24,000. Ripple locked 55% of the total supply in escrows in 2017 to cap the amount in circulation.
As of now, XRP is trading at $0.3702553.4%, with a 24-hour loss of -3.4% and a 7-day uptick of +10.0%.
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BTC and ETH have the best month since 2021
A revival of risk appetite and the anticipation of the Merge made July the best month for BTC and ETH since 2021. Bitcoin saw gains of 27%, the highest jump since October 2021. Its rival shot up by 70% with the best result since January 2021.
The MVIS CryptoCompare Digital Assets 100 index has lost over 53% year-to-date. The Fed’s stance on interest rates has had a significant influence, and the impact was exacerbated by a wave of leveraged downfalls, including the liquidation of Three Arrows Capital.
Now, as the economic slowdown in the US is officially confirmed, more and more investors expect the Fed’s hiking cycle to finish by the end of 2022. Subsequent cuts of the borrowing costs would create more favorable conditions for speculative assets.
Cici Lu, CEO at consulting firm Venn Link Partners, noted that “liquidation of leveraged positions seems to be over,” and “markets may have found the bottom.” According to Adrian Kenny, senior sales trader at GlobalBlock, “The week has continued a very welcome up trend.” He added that “the crypto, and wider markets in general, have seen somewhat of a relief rally in the last few days.”
Ether's remarkable surge has even rekindled the expectations of flippening – surpassing Bitcoin. While it is unlikely to occur in the near future — ETH’s market value is still over 50% less than BTC’s — the sentiment has clearly been catalyzed by the approach of the Merge.
According to a note by Quantum Economics Founder and CEO Mati Greenspan, despite the absence of any guarantees, “just looking at the numbers, it does seem like this event is getting closer by the day.”
Almost 75% of retailers plan to accept crypto within two years
The survey Merchants getting ready for crypto prepared by Deloitte and PayPal reveals increased readiness to embrace digital assets. Retailers have taken notice of consumers’ interest — almost 75% of the 2,000 senior executives polled in June plan to accept crypto or stablecoins within the next two years.
This sample spanned a variety of sectors, including cosmetics, food and beverage, electronics, and transportation. Just over half of the retailers have already invested over $1 million to implement digital payments. 83% of the respondents expect a further rise in consumer demand over 2023.
That said, holding on to crypto is unpopular – most of the businesses want to convert the assets into fiat through third-party payment processors. Legal tender should mitigate the effects of market volatility and make the integration faster and less laborious.
For an overwhelming majority (90%), the toughest challenge is adapting their existing payment infrastructure. The second obstacle is security, followed by regulatory uncertainties and the capriciousness of the market. Most of the merchants cited a lack of clarity, particularly concerning taxation and the implications of holding crypto.
All in all, retailers view crypto adoption with optimism. Almost 50% of the respondents expect it to enhance customer experience and help them grow their customer base.
A number of big brands, such as Starbucks and Lamborghini, already accept Bitcoin. Soon, individuals may be able to spend crypto on many more consumer goods. The authors of the report conclude that “further partnerships with regulated and established institutions in the industry will help deliver the benefits of digital currencies [...] and will continue to build the necessary foundation of trust.”