MWU 22 july HAL

What happened in the crypto market this week?

This week, the crypto market recovered some of the losses recorded last month. Bitcoin is up 13%, after rising above the upper bound of the mid-June/mid-July channel. It now faces the $24,000 resistance zone marked by the April-July downtrend. The bullish sentiment is also helped by the rally in stock market prices and relief on the 10-year US Treasury yield. 

graph BTC Tradingview

Source: TradingView – Past performance not indicative of future results.

Also benefiting from the ease of macro fears, ETH is outperforming with an almost 40% rise in 7 days, erasing its June losses. Investors are betting that the next upgrade of the network (called The Merge) will make it more efficient. The first resistance is located around $1,650, and the $1,850 Fibonacci zone could be the next target. The recovery of the ETH/BTC pair at 0.07 further shows an increased risk appetite.

Which coin has performed best this week? 

Let’s focus on the Ethereum protocol and its token ETH, which marks a 35% performance over the last 7 days. The Merge Ethereum delay is coming to an end: the transition from Proof-of-Work to Proof-of-Stake is finally taking shape. 

On June 8, the Ethereum foundation implemented Proof-of-Stake on one of its test blockchains, Ropsten (“Ropsten testnet”). The foundation simultaneously announced that the Goerli testnet, which is the most important testnet of the Ethereum blockchain, will make its transition from Proof-of-Work to Proof-of-Stake around August 15.  

This Merge of the Goerli testnet indirectly announces the Merge of the mainet for the following month. The Ethereum blockchain should therefore migrate its consensus proof to Proof-of-Stake on September 19th 2022, a date yet to be confirmed.

This transition from ETH 1.0 to ETH 2.0 is a true catalyst. After 5 years of waiting, we have never been so close to one of the most important events for the crypto ecosystem. This can be seen in the appreciation of the ETH, which has taken the rest of the market along with it on its uptrend.

What about our strategies? 

In line with global market trends outlined above, this week’s best performers are ETH strategies. Wise: ETH took full exposure to the ETH rallye and had a 37.16% return, outperforming the uptrend of its underlying asset. Wise: ETH-BTC also took full exposure and benefited from the ETH/BTC pair jump, achieving a 32.4% performance. Likewise, Pulse: ETH BTC unwinded BTC for full long exposure on ETH and is up +31%.

The worst performers are Pulse: BTC Hourly 2 and Wise: ADA. Pulse: BTC Hourly 2 is down -6.14%, suffering from false signals and a lack of short term accelerations. Meanwhile, Wise: ADA (-1.23%) underperformed its underlying asset as it missed ADA’s rise in price after unwinding its exposure on July 18.

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Investing involves risk, including the possible loss of all the money you invest. In particular, crypto-assets are a highly volatile and speculative asset class. HAL is only suitable for traders who are willing to bear the risk of loss and experience sharp drawdowns. Past performance is not necessarily a guide to future performance.

The purpose of this material is to provide objective, educational and interesting commentary and analysis on developments in the crypto-assets sector. Nothing in this material should be interpreted as constituting an offer of (or any solicitation in connection with) any investment products or services by any member of the CoinShares Group where it may be illegal to do so. Access to any investment products or services of the CoinShares Group is in all cases subject to the applicable laws and regulations relating thereto.