Was Ethereum 2.0 the beginning of the end for currency competition?

In September 2022, the Ethereum network took the big step: changing from Proof of Work to Proof of Stake. With this transition, the network will be much more efficient and scalable; however, the criticism that Ethereum has said goodbye to the competition with Bitcoin with this step does not disappear.

In recent years, the Ethereum network has been running on the proof-of-work consensus mechanism that Bitcoin also uses. This secures the network thermodynamically through the mining process. Ethereum has had increasingly higher transaction fees in recent years, which has made it difficult to scale.

The core of Ethereum 2.0 is Ethereum Merge. The Ethereum network was changed from Proof of Work to Proof of Stake, which means that the Ethereum network was able to operate with 99.9% more energy efficiency in one fell swoop. This lays the foundation for high scalability when running smart contracts. In the future, shard chains will greatly increase scalability.

Why Bitcoin Runs on Proof of Work? Criticism of Proof of Stake

Many Ethereum supporters enthusiastically announced the move to proof-of-stake, which should finally reach a new level of efficiency. The network must continue to grow, and more and more dApps must be built on the network. Proof of Work was considered slow and consumed a lot of power. Critics speak of it as a method that is harmful to the environment.

Bitcoin deliberately uses proof of work to thermodynamically secure the network. Therefore, Bitcoin has proof of a physically provided and decentrally distributed line. This is what makes the Bitcoin network so incredibly secure. Ethereum left this path with the move to proof of stake.

There are mechanisms here, such as freezing stakes in the event of a planned acquisition. Still, it’s hard to deny that securing proof of work is superior to physical performance in this case.

Is Ethereum’s Competition with Bitcoin Over?

In the early years of the Ethereum network, Ethereum fans often referred to the network as a better alternative to Bitcoin. Other followers, who took a more thoughtful approach, saw Ethereum as a completely different network with different functions than the Bitcoin network.

After the Merger it should be impossible for the ether token to become a better currency than bitcoin. Through proof of work and its massive hash rate, the Bitcoin network is extremely secure and not controlled by any central party, neither individual, nor state, nor corporation. This toughness characterizes Bitcoin, and makes it the ideal decentralized currency. Furthermore, Ethereum acts as a decentralized network with its own diverse functionalities. This makes the ether token extremely valuable in the future.

By Audy Castaneda

It was a bullish Saturday, with BTC rising 0.21% to end the day at $24,633. The Fear & Greed Index stayed within the Greed zone, holding steady at 60/100.

On Saturday, bitcoin (BTC) rose 0.21%. Consolidating a 4.48% rally since Friday, BTC ended the day at $24,633. Despite the bullish session, BTC failed to reach the $25,000 level for the first time in three sessions.

After a range-bound start to the day, BTC fell to a low of $24,450 by late morning. Moving away from the first major support level (S1) at $23,614, BTC rallied to a late-afternoon high of $24,878. Missing the first major resistance level (R1) at $25,287, BTC pulled back, to end the day at $24,633.

Regulatory Risk Relief Continued to Provide BTC Price Support

It was a quiet Saturday, with no crypto events affecting investor appetite. The lack of events made investors consider the events of the week.

Following the SEC’s moves against cryptocurrency staking and stablecoins, increased scrutiny from US lawmakers on SEC activity led to a bullish midweek session. While the shift in sentiment toward regulatory risk outweighed Fed fears, the increased likelihood of a more hawkish Fed interest rate path remains a drag on the crypto market.

However, there would have to be a deteriorating macroeconomic environment that would affect investor confidence. The latest round of US statistics removed any immediate fears of an economic downturn in the US. Retention sales rose 3.0%, with labor market conditions difficult despite the policy measures of the Fed to bring inflation to target.

The talk between the SEC and US lawmakers will continue to be in the spotlight. However, investors would have to monitor crypto news wires for news related to Binance, FTX, Genesis, and Silvergate Bank.

Bitcoin (BTC) Price Action – Technical Indicators

BTC needs to avoid a drop through the $24,654 pivot to target the first major resistance level (R1) at $24,857. However, a return to $25,000 would signal a breakout session. Crypto news wires need to be crypto-friendly to support a prolonged rally.

In the event of a prolonged rally, BTC would likely test the second major resistance level (R2) at $25,082 and Thursday’s high of $25,234. The third major resistance level (R3) sits at $25,510.

A drop through the pivot would bring the first major support level (S1) into play at $24,429. However, barring a crypto event-driven sell-off, BTC should avoid going below $24,000. The second major support level (S2) at $24,226 should cap the downside. The third major support level (S3) sits at $23,798.

A hold above the major support levels and the 50-day EMA ($23,455) would support a break from R1 ($24,857) to the R2 ($25.08) target. However, a drop through S1 ($24,429) would give the bears a run on S2 ($24,226). Barring a crypto event, BTC should avoid the 50-day EMA ($23,455).

By Audy Castaneda

SEC measures, crypto taxes, PayPal stopping stablecoin development, Celsius creditors payout, and Siemens reliance on Polygon, hit the headlines this week.

This was an eventful week in the crypto space is coming to a close. Below are the most important events around Bitcoin, Ethereum and Co. at a glance.

The SEC is Cracking Down on the Crypto Space

Currently, the US is cracking down on the cryptocurrency sector. Lawsuits are being filed against cryptocurrency companies like Kraken, long-awaited licenses like Paxos are being denied, and banks like Signature are being pressured not to do business with cryptocurrency companies.

In the meantime, there is talk of concerted action by the US Treasury Department, the US Federal Reserve, and the US Securities and Exchange Commission against the cryptocurrency sector, as noted in BTC-ECHO editor-in-chief Sven Wagenknecht comments.

Crypto Taxes Are Being Negotiated at the Federal Fiscal Court

For the first time in its history, the Federal Tax Court, Germany’s highest financial court, has to comment on the taxation of cryptocurrencies. Basically, the question is whether Bitcoin and co. are considered economic goods and are, therefore, relevant under tax law. The decision could have far-reaching consequences for crypto investors.

This was preceded by a lawsuit filed by a Bitcoin investor who, almost a year ago, claimed taxes from a cryptocurrency exchange from the tax office. Bitcoin is not an economic good, he argues. The competent court of finance in Cologne dismissed the claim and the investor turned to the BFH. A total of 3.4 million euros is at stake.

PayPal Stops Stablecoin Development

As Bloomberg reported, payment service provider PayPal will stop working on its own stablecoin until further notice. The reason for this is the recently stricter attitude of the regulators, as they say.

As an example, PayPal worked with Paxos, the operator of Binance’s BUSD stablecoin, to develop the dollar token. However, after the attack on crypto exchange Kraken, PayPal itself became a target of the SEC.

Former Celsius Chief Will Pay Millions

Celsius bankruptcy trustees and company creditors are demanding millions in payments from the former boardroom of the bankrupt crypto lending service, including Alex Mashinsky, former Celsius CEO, and his wife.

According to a court document dated Feb. 14, Mashinsky and Celsius co-founder S. Daniel Leon are accused of, among other things, artificially inflating the token of crypto lender CEL. They also made “negligent, reckless and selfish investments” when Celsius was already threatened with bankruptcy.

Siemens Issues Crypto Security on Polygon

A current press release claims that on February 13, Siemens AG issued a crypto security for the first time, in accordance with the Electronic Securities Act, eWpG for short. The issue volume of the digital security is 60 million euros. The private bank Hauck Aufhäuser Lampe acted as registrar and paying agent for the transaction. DekaBank, DZ Bank and Union Investment invested in the bearer bond.

By Audy Castaneda