CoinLoan Weekly: CPI-fueled rally, institutional adoption, ETH’s surge

Price dynamics

BTC price

After spiking to around $24,185, BTC dipped in anticipation of the CPI data and rose over $24,000 again on Wednesday, August 10. Subsequently, the coin approached $24,800 twice — on Thursday, August 11, and Saturday, August 13. The morning of Monday, August 15, pushed BTC to a new high — $24,995.08.

Aside from the better-than-expected US inflation figures, investors’ spirits were lifted by stock market news — Nasdaq and S&P 500 saw their best weekly streak since 2021. The Fear & Greed index held over 45 throughout the weekend, reflecting Neutral sentiment for the first time since April. The last instance of BTC trading around $25,000 was in early June.

As of this writing, BTC is trading at $24,084.17, with a 24-hour slide of -1% and a 7-day increase of +3.8%.

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ETH price

Following a jump over $1,800, ETH dipped before the CPI-fueled rally and shot up. It moved in a less choppy fashion than BTC, gaining roughly three times as much. Thursday, August 11, saw ETH surpass $1,900, and the weekend brought a slim range with a peak of $2,024.50 on Sunday, August 14.

The optimism about the Merge continued to stoke growth, and the inflation data immediately pushed ETH from a 7-day low of $1,671.64 to around $1,850 (Wednesday, August 10). Now, investors are looking forward to pre-event momentum linked to the next CPI print — the latter will be published six days before the long-awaited upgrade.

As of now, ETH is trading at $1,895.78, with a 24-hour decrease of -1.9% and 7-day growth of 11.6%.

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XRP price

XRP remained trapped under $0.39 until Sunday, August 14, when it peaked at $0.392002. The token moved in lockstep with BTC, rising from the 7-day low on Wednesday ($0.360950 on August 10), but its gains were negligible in comparison.

Over the past two months, XRP has been moving sideways, and the higher highs may be too weak to push it further. Last week, Ripple actively participated in moving almost 300 million tokens onto active wallets and exchanges for conversion into USD.

As of now, XRP is trading at $0.373605, with a 24-hour slip of -1.9% and a 7-day uptick of 0.2%.

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Cryptocurrency news

BlackRock adds spot BTC exposure, pension funds are bullish on the coin

A week after announcing its unprecedented partnership with Coinbase, BlackRock deepened its foray into crypto. The asset management giant launched a competitor to Grayscale Bitcoin Trust (GBTC) — its own private trust giving U.S. institutions direct exposure to spot BTC.

The announcement highlights “substantial interest from some institutional clients” in ways to access digital assets “efficiently and cost-effectively” using BlackRock’s technology and products. However, it does not specify the fees or minimum investment requirements.

The firm is unperturbed by the market downturn. BlackRock noted, “Bitcoin is the oldest, largest, and most liquid cryptoasset, and is currently the primary subject of interest from our clients within the cryptoasset space.” While BTC is over 65% below its historic high of around $69,000, many investors believe it has found a bottom with stocks, particularly as the correlation is stronger than ever.

The post also touched upon the environmental concerns hindering wider adoption. BlackRock praised RMI and EnergyWeb, two energy nonprofits, for their contribution to the transparency of sustainable energy usage. Both organizations are developing criteria for certifying renewable energy-powered mining.

BlackRock’s move is seen as another sign of legitimacy for the asset class. Recently, many US-based institutions have changed their hostile tune. According to The Wall Street Journal, some pension fund managers, including those at VanEck, have a bullish stance on BTC.

Fairfax County Retirement Systems, a $6.8 billion Virginia-based pension fund, has recently invested $70 million in yield farming. This amount is split evenly between two funds — VanEck’s finance income fund and the digital yield fund run by Parataxis Capital.

The Houston Firefighters’ Relief and Retirement Fund, which has seen its $25 million BTC and ETH investments halve since 2021, is also undaunted — chief investment officer Ajit Singh has stated that “volatility and large swings are expected”.

Pension funds have been exploring alternative assets for the past 20 years as a result of low fixed-income yields. Some entities, like California’s $300 billion teacher fund, still shun crypto. For others, the bear market is an opportunity to expand their investment, as less interest from individuals translates into more attractive yields.

Impending Merge pushes Ether to a two-month high

The final dry run for The Merge pushed ETH to the highest levels since early June. This last preparatory step caused the price to rocket over $1,900 on Thursday, August 11.

The Merge, which targets higher efficiency and sustainability, could become a major milestone in the history of crypto. The years-awaited upgrade is scheduled to take Ethereum off Proof-of-Work on September 19. On Wednesday, August 10, a process identical to the transition was successfully simulated on the Goerli testnet.

When the blockchain migrates to Proof-of-Stake, the responsibilities of the miners will be taken over by stakers, or validators. Instead of substantial computing power, participation will require holding a specific amount of ETH.

The Merge will speed up blockchain transactions — currently, Ethereum is notoriously slow compared to Visa and Ethereum killers like Solana. The energy savings could reach 99.9%.

According to a client note by JPMorgan analyst Ken Worthington, the buildup to the upgrade is the primary driver of the past weeks’ rally, in particular, “positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June.”

Whether flippening (surpassing BTC) is possible remains to be seen, but some investors consider this irrelevant as the assets do not compete directly. According to Kaj Burchardi, managing director of BCG Platinion, a division of Boston Consulting Group, “Ethereum ... is not a use case. It’s providing possibilities of implementing really good use cases like NFTs [nonfungible tokens] and banking products on a platform. Bitcoin is a use case.”