What happened
Crypto markets moved sharply higher on Thursday morning as investors cheered more stability than we’ve seen in weeks. Celsius Network, a major cryptocurrency lender and finance company, officially filed for bankruptcy protection, and Ethereum (ETH 10.91%) moved closer to its proof-of-stake consensus mechanism. Sometimes, simply reducing uncertainty is enough to push crypto higher.
In the past 24 hours, as of 2 p.m. ET, the value of Bitcoin (BTC 4.58%) was up 4.7%, Ethereum was up 10.1%, and Polygon (MATIC 20.01%) had jumped 21%.
So what
The biggest news is that Celsius Network filed for Chapter 11 bankruptcy protection in the U.S., which at least ends speculation about the company’s future. Management said it has $167 million in cash on hand to fund operations, but customer funds will now be part of the Chapter 11 process and not available on a first-come, first-served basis.
As bad as it is for a company to file for bankruptcy protection, this does bring the Celsius Network saga to a conclusion of sorts. The company’s positions will be unwound, and creditors will be paid back. Eventually, some customers may even get their money back.
In more meaningful news, Ethereum’s ninth shadow fork went live, continuing tests of its proof-of-stake consensus mechanism and moving closer to the Merge of its testnet and mainnet. Investors have been anticipating the upgrade because it’s supposed to reduce transaction costs for Ethereum and increase the number of transactions that can be performed per second.
The jump in crypto is even more shocking when you consider that U.S. stock markets and global commodity markets are down significantly today. Stock indexes are down nearly 1% while gold and oil are down 1.6% and 1.3%, respectively, as I’m writing.
Now what
It will likely still take some time for the positions that Celsius Network built up to be liquidated, but at least there’s a path forward now. That’s what the market is cheering, and I think it could reduce the amount of leverage in the crypto market overall.
If Ethereum can complete the move to proof of stake and reduce costs and increase blockchain throughput, it could be a game changer. This is still the biggest developer network in the world of cryptocurrencies, and lowering costs would increase the number of use cases available.
The next few months will likely continue to be volatile, but the collapse of some of these leveraged trading platforms that did little to add utility to the crypto industry will likely be a bump in the road. Long term, the crypto industry will be about building new, disruptive technology — not new ways to trade assets — and today’s news gets everyone a step closer to that.
Travis Hoium has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Polygon. The Motley Fool has a disclosure policy.
This news is republished from another source. You can check the original article here