News
13
Sep
crypto news

This website has affiliate links. We may receive compensation if you visit partners we recommend. Read more about our advertising principles from the About Us page.

News Overview 9/13: USA, Ethereum, Bitcoin, Luna Classic, Binance

New crypto regulation is being prepared in the US. The SEC’s position remains unchanged; it considers most cryptos to be securities. Ethereum’s The Merge is happening in a couple of days! Bitcoin reached an important milestone. Why has Luna Classic risen by hundreds of percent in September? Binance removes USD Coin trading pairs.

SEC considers most cryptos to be securities

The US Securities and Exchange Commission (SEC) is the best-known crypto regulator in the world. In the US, there are currently several processes underway to streamline crypto regulation. SEC boss Gary Gensler commented on the subject last week.

In Gensler’s view, cryptos do not need separate regulations but should be treated within the framework of existing legislation. The SEC’s view is that most cryptos are, in fact, securities. This would force cryptos (and crypto exchanges) to be subject to the same regulation as equities.

However, Gensler has issued a statement saying that Bitcoin is not a security. He also supports the idea that Bitcoin should be regulated by the CFTC, the body that regulates the trading of commodities (gold, silver, etc.). Check out Gensler’s thoughts in the Coindesk interview below.

The main question now is: which other cryptocurrencies are not securities? Gensler has refused to give a clear answer. The SEC has already ruled in 2018 that Ethereum is not a security, so it probably falls into the same category as Bitcoin.

Last week, a report was also published on Bitcoin mining. The background is the executive order issued by Joe Biden in the spring, in which he demanded reports on cryptocurrencies from various government agencies.

As you might expect, the report highlights the negative environmental impact of Bitcoin mining. It even raises the idea of banning Bitcoin mining. However, this is hard to believe in practice.

Even the EU voted down the PoW ban earlier this spring, and there is a lot of lobbying power in the US on Bitcoin. Moreover, the US has become the world’s largest Bitcoin miner. Shutting down this industry would be a massive mistake. The US is unlikely to follow in China’s footsteps here.

In addition to cryptocurrencies and mining, the US will soon see regulation of stablecoins. A similar process is also taking place at the EU level.

The Merge update will take place this week

We have reported on Ethereum’s The Merge update several times this year. And with good reason. The Merge is the most important technical update in the crypto world since the Bitcoin halving of 2022.

The Merge has been in preparation all spring and summer. The upgrade has been running on all Ethereum test networks for the past few months, and a week ago the final stage before The Merge was reached. This was an update called Bellatrix.

Bellatrix was run on the Ethereum network without any major problems. A couple of days ago, a final shadow fork was made. These are smaller updates to test individual aspects of The Merge.

Everything is now ready for the long-awaited Merge. Years of work and preparation is finally coming to an end. According to Ethernodes.org, the exact date is set for Thursday morning (15.9.) European time. The Merge has also been noted by Google:

The Merge hasn’t caused any major moves in the market. Ethereum has done well against Bitcoin since June, but the last few weeks have not seen any significant mooning. This is probably due to the ongoing bear market.

It is typical that good news does not boost cryptocurrency prices at the bottom of a bear market. Investors react violently mainly to negative events. If The Merge is delayed or even fails, it would certainly have a big impact on Ethereum’s price.

At the moment, it’s hard to believe in a big drama. The Merge has been prepared and tested for so long. If all goes well, we could well see a small “relief rally” of around 10-20%. It is hard to believe in a bigger price reaction given the overall market picture.

The impact of The Merge will be seen in the months and years to come. You can read more about them in our guide to The Merge.

Bitcoin reached the 5000-day milestone

Let’s look at some of the news related to Bitcoin. We’ll start with an even number, as Bitcoin turned 5000 days old yesterday (12.9.)! Satoshi Nakamoto launched the Bitcoin blockchain on 3 January 2009. Contrary to popular misconception, Bitcoin has not been 100% operational since its birth date.

The Bitcoin network has been down twice: in 2010 due to a so-called value overflow bug (8h 27 min) and in 2013, when two different versions of the Bitcoin client software caused the blockchain to split for 6h 20 min.

Last week also marked the anniversary of the Bitcoin revolution in El Salvador!

On 7 September 2021, El Salvador introduced the Bitcoin law, making bitcoin an official means of payment. El Salvador has disappeared from the headlines during the 2022 bear market. However, this does not mean that the Bitcoin revolution has failed. Such processes take time.

Our reporter Tuomas Laine visited El Salvador this summer and spent some time at the famous Bitcoin Beach. Read more about this topic in Tuomas’ travel report.

The hash rate of the Bitcoin network has also reached a new ATH.

 

The increase in mining power reflects the fact that new Bitcoin mining farms are constantly being built around the world. This, in turn, reflects the confidence of large investors in the future of Bitcoin. At the same time, of course, the efficiency of miners is increasing as new versions are released.

There is also a flip side to this coin. The sharp increase in the hash rate combined with the low price of Bitcoin means that the revenue per tera hash for miners is approaching all-time lows. One ASIC miner is making less and less profit in dollar terms as competition intensifies.

In time, the situation will improve when Bitcoin eventually starts a new bull market.

Terra Luna Classic is up hundreds of percent in September

One of the strangest events of September has been the skyrocketing of the Luna Classic (LUNC) token by hundreds of percent. What’s going on?

Most readers remember the collapse of the Terra project in early May. The whole platform collapsed when investor flight from the UST stablecoin led to the “death spiral” of the native token LUNA. However, the community reacted quickly and created a new Terra platform without the algorithmic stablecoin just a couple of weeks later.

The new Terra platform native token got a LUNA ticker for itself. The old platform thus became Terra Classic and its native token Luna Classic (ticker LUNC). The coin that rocketed in September is therefore the Luna Classic, which in theory should be a dead and buried blockchain.

But this is not the case. Part of the community is still standing behind the “old Terra” and trying to revive the Luna Classic coin. This is why the blockchain is introducing a 1.2% tax on transactions. In practice, this tax means token burn.

The Terra Classic community has been trying to persuade exchanges to implement the tax also on spot trading, but without success. The idea is to artificially create deflation, which would increase the value of the token in the long run.

In reality, the end result is not going to be a success. The Twitter thread below sums up the issue well.

In the end, the effect of the tax is totally insufficient to significantly reduce the amount in the circulation of the Luna Classic. Most likely, it will only destroy the already low level of activity on the network. Quote from the thread above:

LUNC has virtually no real development activity with which to sustain interest or usage. The 1.2% tax will kill almost all network usage, almost immediately. And LUNC will become yet another ghost chain.

The price of the LUNC token has plummeted by almost 50% from its peak five days ago. It is likely that the biggest beneficiaries of this situation are speculators who have made money from the Luna Classic’s price increase.

Binance removes USDC-trading pairs

Binance, the world’s leading cryptocurrency exchange, announced an interesting move last week. Binance is going to remove the trading pairs of the world’s second-largest stablecoin. This means USD Coin. The USDP and TUSD trading pairs will also be removed in the same context.

Binances’ announcement was first reported as the end of USDC support. However, this is not the case. Binance only removes USDC, USDP, and TUSD trading pairs and converts existing balances 1:1 to its own Binance USD (BUSD) stablecoin balance.

Binance customers can still deposit and withdraw USDC stablecoins. Their balance will only appear as a BUSD balance on the Binance platform. Jeremy Allaire, boss of Circle, the USDC backer, was not concerned about Binance’s decision.

Has Binance now started a wider stablecoin war to strengthen the position of BUSD? Is it the upcoming US stablecoin regulation that is behind this? Hard to say. Such a move is by no means exceptional in itself.

Binances’ competitor FTX has been doing the same for all stablecoins for a long time. Each stablecoin deposit is automatically converted into a single USD balance on the exchange. Thus, for example, there is one truly liquid USD trading pair for Bitcoin and no USDT, USDC, BUSD, etc. trading pairs.

The USD balance on the FTX can also be withdrawn in USDT, USDC, or BUSD stablecoins.

eToro banner