Gary Gensler, Chairman of the SEC, testifies Thursday, September 15, 2022 during a Senate Committee on Banking, Housing and Urban Affairs hearing in Washington, DC. Photo: Graeme Sloan/Sipa USA (AP)
Ethereum, the world’s second-largest cryptocurrency, continued to plummet in price over the weekend after the network’s widely publicized technical change known as “the merging‘ last Thursday, as well as comments from the head of the Securities and Exchange Commission that Ether may need to be treated as a security. Ethereum is currently trading around $1,290, down over 11% from 24 hours ago, while Bitcoin, the world’s most popular crypto, is also down 8% to just $18,420.
Ethereum completed a network upgrade called “The Merge” last Thursday, moving the cryptocurrency from a proof-of-work system to a proof-of-stake system. Proof-of-work was incredibly energy-intensive and required so-called “miners” to run their computers through a guessing game to verify transactions. Proof-of-Stake allows people who already own Ether to “stake” their cryptocurrency to verify transactions against longer-term interest, which is earned similar to how a savings account might earn interest.
And therein lies the problem. The move to a “proof-of-stake” system means that people who invest in Ethereum and then “stake” their Ether are more likely to treat their investment as something more akin to security than currency — especially since very few do People actually use ether to pay for things. And the staking has drawn the attention of the likes of SEC Chairman Gary Gensler, who has made post-merger comments that have crypto investors nervous.
“From the coin’s perspective…this is another indication that under the Howey Test, the investing public expects gains based on the efforts of others,” Gensler said Thursday, according to a report by the Wall Street Journal.
As the journal notes, Cardano and Solana are already two popular proof-of-stake coins. Cardano is down 80% YoY, while Solana is down 78% YoY.
Bitcoin is currently trading around $18,420, down 8% over the past 24 hours and well below the all-time high of $68,000 set on November 9, 2021. Also, in the fall and winter of 2021, you started watching all of these television commercials from celebrities like Matt Damon, Larry David, and LeBron James. Funny how they begged you to buy on top just as smart money was exiting their positions. The Ether Foundation, to give just one example, has sold a huge amount of Ethereum rights at the top of November. They’re either very lucky or it’s all a Ponzi scheme.
Click through for a look at how the world’s top cryptocurrencies are faring Monday morning. Not only during the day, but also in the past week everything has been canceled. Over the past 24 hours, BNB is down about 7%, XRP down 10.6%, Cardano down 10.7%, Solana down 8.6%, and Dogecoin down 8.5%. Rounding out the top ten cryptocurrencies, Polkadot is down 12%, Shiba Inu is down 1.4%, and Lido Staked Ether is down 10.7%.