Monthly report of July 2022
This monthly report reviews the most important cryptocurrency news in July and delves deeper into the tentative date of Ethereum Merge, the advances taken by Polygon, the report on USDC reserves, and Tesla's bitcoin sales.
July in the cryptocurrency market
July was a very positive month for cryptocurrencies. Of the cryptocurrencies offered by Northcrypto, the biggest gainer was Polygon, whose price shot up almost 100 percent during the month. The prices of Aave and Ethereum were also on a strong rise, increasing by around 75 and 60 percent. The prices of Chainlink, Bitcoin and Litecoin ended up about 25, 20, and 15 percent higher at the end of the month than at the beginning of the month.
Ethereum Merge's tentative date
New information on the upcoming Ethereum Merge, i.e. the transition from the Proof of Work algorithm to the Proof of Stake algorithm, came out in July. The Ethereum developer under the name superphiz.eth released the latest timeline related to the Ethereum 2.0 on the social networking and microblogging service Twitter. According to the timeline, the Merge would be taking place on September 19.
Advances taken by Polygon
Scaling solution Polygon's MATIC token was one of the biggest gainers in July. One major reason behind the surge was the news of Polygon's selection to media and entertainment conglomerate Disney's Accelerator program. The program aims to spur the growth of innovative companies and this year the program focuses on augmented reality (AR), artificial intelligence (AI), and NFTs.
Polygon also made a very significant release in July when it introduced Polygon's zero-knowledge Ethereum Virtual Machine (zkEVM) scalability solution. zkEVM is a technologically and cryptographically advanced layer 2 scalability solution running on top of Ethereum that aims to achieve transaction costs that are many times lower than those of Ethereum. According to the people behind Polygon, zkEVM is the biggest technological advancement in the cryptocurrency ecosystem this year after Ethereum Merge.
Report on USDC reserves
Circle, the payment services company behind stablecoin USDC, released its first full monthly report on assets that back the price of USDC. Circle's report shows that the value of assets that guarantee the USDC price is 1:1 with the USDC price, meaning USDC is fully backed as a stablecoin. About 75 percent of the assets that back USDC are US Treasury securities and about 25 percent are US dollars.
Tesla sold 75 percent of its bitcoin holdings
An electric car and clean energy solution manufacturer Tesla announced it had sold about 75 percent of its bitcoin holdings during the second quarter. Tesla CEO Elon Musk reasoned selling bitcoin with production problems in China as well as a need for cash. However, Musk also said the company is ready to increase its bitcoin holdings in the future, so selling bitcoin should not be understood as a verdict on Bitcoin. Tesla announced about 48,000 bitcoin purchases in February last year.
Summary
The long-awaited Ethereum Merge is likely to be closer than ever before, with the Merge getting its tentative date of September 19. The price of Ethereum was on a prominent rise in July, certainly at least in part due to the approach of Merge. It will be interesting to see if the price continues to rise towards September and how the price behaves after the Merge, as Ethereum potentially becomes deflationary.
Polygon's MATIC token was another major gainer in July. The rise was driven by selection as the only cryptocurrency project for Disney's Accelerator program, as well as the introduction of the technologically advanced Ethereum scalability solution zkEVM.
Circle, the company behind stablecoin USDC, sought to create transparency and respond to doubts about stablecoins raised by the collapse of Terra's UST stablecoin with the first monthly report on reserves that back USDC. Circle's report received a lot of praise in the cryptocurrency world, and many people's faith in USDC grew even stronger.
Tesla's bitcoin sales in the second quarter came as a surprise to many. However, Tesla's sales were likely largely due to problems outside Bitcoin and cryptocurrencies, such as the need for cash in an uncertain situation.
Ville Viitaharju
Cryptocurrency specialist
Last updated: 10.02.2023 08:54
