Is the merge ever going to happen?
I'm Joel Flynn.
This is The Daily Forkast.
August 1st, 2022.
Testnet migrations have got people worried about the move to ETH2.
Vitalik Buterin calls someone a clown over views about the Bible.
CoinFlex is firing people and the US government has warned crypto investors just how much
they could lose.
This is what's happening from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
So when is the merge going to happen?
It had seemed close to certain.
September 19th was finally when Ethereum would be moving to proof of stake.
But there has been a lot of talk this weekend about potential delays.
The worries are that some Testnet still haven't been migrated from proof of work to POS.
Tether has been trying to reassure its users about potential problems though over forks
with ETH2.
The Stablecoin platform is built on Ethereum, its CTO, Paolo Ardoino said on Twitter that
tether will be supporting ETH2.
Ethereum's price remained steady over the weekend.
It was trading close to US$1,700 as of 9 a.m.
Hong Kong time Monday.
Ethereum Classic, however, lost some of the gains it made last week.
It was down almost 7% overnight to trade at a little under US$37.
Interest in the token has grown, despite the merge equipment rendered largely useless by
the transition to POS could instead be used to mine ETC.
Meanwhile, Vitalik Buterin has called Microstrategy's Michael Saylor a total clown.
That is after Saylor claimed that Ethereum is basically unethical.
The noted Bitcoin bull said that securities laws have their basis in the Bible, and that,
he said, means that securities laws should apply to crypto.
Saylor reckons that Ethereum is a security, but he claims Bitcoin is a commodity and the
only one in crypto.
Interestingly, proposed new rules for crypto in the US would define all decentralized digital
assets as commodities.
Buterin has also weighed in on the metaverse.
He believes it will happen, but that any existing corporation trying to intentionally build
one will not succeed.
He added that efforts by Meta, formally Facebook, to do so will misfire.
Meta CEO Mark Zuckerberg sparked a surge of interest last year after announcing a pivot
to focus on the metaverse renaming the company shortly after.
Meanwhile, more job cuts.
This time it's from crypto yield platform CoinFlex.
In a blog post, the company said they have let go a significant number of team across
all departments and geographies.
They added the move will reduce the company's cost base by at least 60%.
CoinFlex froze withdrawals back in June after facing liquidity issues, although now it is
allowing limited transactions.
Of course, CoinFlex isn't the only platform to have halted withdrawals over the past couple
of months.
For investors, big questions have arisen over what protection is in place for the cash they
have tied up.
In some cases, the impression has been given that government backed insurance is in place.
However, the US Federal Deposit Insurance Corporation has warned that is not the case.
Forkast's Monika Ghosh has more.
The FDIC is advisory comes hot on the heels of an order issued to Voyager Digital last
week, demanding the lender stop making false and misleading claims over insurance for customers
funds.
The agency says it is seeking to address misconceptions over the circumstances in which it offers
insurance for investors deposits, particularly where crypto assets are concerned.
It makes clear that insurance only applies to depositors of an insured bank when their
bank feels it does not cover any assets issued by non-bank entities like crypto companies.
The advisory goes on to say that banks covered by FDIC insurance need to manage risks arising
from any third party relationships with crypto companies.
It suggests that any related marketing materials and disclosures should be reviewed to ensure
accuracy and clarity.
I'm Monika Ghosh, Forkast.
The risk of recession, the Fed rate hike, the global economy, all of these factors are,
of course, driving markets up and down.
What, though, could these long term effects be for crypto?
Joining us now to talk about that more is Annabelle Huang, managing partner of Amber
Group.
Annabelle, great to have you with us as always.
Let's talk about us GDP versus the Fed.
Presumably, in your opinion, is the Fed that is more important as far as crypto investors
are concerned out of those two things.
But how much really does GDP factor into the equation, do you think, for crypto markets?
I think it definitely gave the crypto market a boost, which is ironic because GDP didn't
print that well.
But I think the narrative is now is comedy is not doing well.
Then the Fed might consider tapering a bit earlier and might start cutting rates a bit
earlier, which will give sort of the easy money era again and pave the way for another
crypto boost.
But it's important to note that GDP is not the Fed's mandate.
So I think it is an important stat to look at, but doesn't necessarily equate to any
monetary policy sort of changes.
Yeah, it's sort of a weird situation, isn't it, where bad news is good news and like everything
sort of seems upside down in a lot of ways.
I mean, rightly you point out, you know, this is just the sort of thing that keeps expectations
broadly where they are currently.
How, though, do you make sense of this now is investor what are you looking at.
Globally in terms of what's happening in Japan and Europe are also in the sort of broader
geopolitical conflict that's still ongoing.
I would say all of these factors ultimately affect global economy or global monetary policy,
which in turns also affect Bitcoin, ether, the majors as well as the broader crypto market.
But I think in terms of crypto, particularly if you if you hold a slightly longer term
view than if we zoom out and say that, okay, maybe the next crypto cycle is going to come
in 2024, if not before, then what can we start doing now?
What are some of the more fundamental things we can focus on?
Is it the secondary market, or is it maybe some of the private market or venture side
opportunities?
And as investors, it's perhaps not a bad idea to still send cash way until there's clear
movement for before you jump back in.
Yeah.
Look, you mentioned crypto cycles there.
I think everyone's waiting for this this decoupling, this deep correlation of crypto and traditional
assets.
What sort of signals are we going to be looking at for that, do you think?
We're in an interesting spot where the macro dollar funding cycle coincides with the crypto
cycle because crypto cycles tend to be a lot shorter than I think we are likely going to
see a decoupling hopefully to the upside of crypto versus broader market.
And the timing again is really difficult to say, but I think it would be a combination
of a lot of the crypto specific catalysts.
So merge or whatever happens after the merge and then also the Bitcoin having, which is
the, you know, the good old classic catalyst, but that hasn't felled us yet.
So I think we're all paying attention to this and I think a lot of the other developments
in the works and we'll see if the next cycle we can actually get a bit closer to mass adoption
or or theory.
Yeah, as you said, bear market rally certainly seems to be the basic characterization of
what's happening.
You sound a little bit optimistic, I think it's fair to say.
I wonder whether that's a decent characterization of how a lot of people are feeling after last
week in the data.
I think a more sort of longer term optimistic and I think a lot of people are short term
hard to say.
I think that's that view shared about a lot of the clients, investors in general.
But I think for those of us who have seen similar market movement and sentiment, then
I think it's probably slightly easier for us to to believe in that upside later.
All right, thanks a lot for that.
Annabelle Huang, Managing Partner of Amber Group.
And finally, a crime like no other in South Korea.
According to local reports, an employee of Bnk Busan Bank allegedly embezzled roughly
US$1.1 million in customer funds to invest in Bitcoin.
The unnamed employee reportedly took the cash in several transactions by depositing funds
customers received from overseas into a personal account belonging to a romantic partner.
Bnk Busan Bank says it will take legal action against the employee, along with carrying
out a self audit.
All right, that's your Daily Forkast from Asia to the world.
Follow us on Twitter for the latest updates @Forkast_News.
Head to our website as well for more detail on all of today's stories and more.
Until next time, I'm Joel Flynn.