What happened
Bitcoin (CRYPTO: BTC), ether (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) are up 6.82%, 8.16% and 8.36% in the past 24 hours. As of 10:30 a.m. EDT, they are now trading at $ 48,518.76 per coin, $ 3,293.94 per token, and $ 0.3319 per unit, respectively.
Earlier in the day Coinbase Global (NASDAQ: COIN), the world’s second largest cryptocurrency exchange, announced it would add $ 500 million worth of cryptocurrencies to its balance sheet. The move sent the entire sector into a monstrous rally. Coinbase stock is also up 3.10% to $ 255.98 per share over the same period.
Image source: Getty Images.
so what
It’s not just Coinbase’s big move that investors are excited about. On August 19th, the second largest mortgage lender in the US UWM holdings, announced that it would accept Bitcoin for home loans. The rollout could go into effect by the end of the third quarter, and the company is also considering adding other cryptocurrencies like Ethereum to the mix.
Speaking of Ethereum: On the same day, it was revealed that the Ethereum 2.0 staking contract had become the largest holder of Ether at $ 21.3 billion. The news shows the growing confidence in the Ethereum Foundation’s transition to their 2.0 network. By the end of 2022, Ethereum will run a proof-of-stake protocol that its development team estimates will cut its energy consumption by 99% – essentially erasing concerns about its environmental sustainability.
As for Dogecoin, the once-in-a-lifetime digital currency of the meme is gaining recognition. During the popular discount brokerage Robinhood Markets‘Profit release on Aug. 18, the company announced that Dogecoin accounted for 62% of cryptocurrency sales in the second quarter. On the same day, Ethereum founder Vitalik Buterin announced that he would join the development team behind Dogecoin as a board member.
What now
Dogecoin is leaving its reputation as a hoax cryptocurrency. Since the beginning of the year, the number of merchants who accept Doge as a form of payment has risen by 34.7% to 1,616. In addition, due to its slightly inflationary nature, the network has found its unique niche. Dogecoin miners do not face the risk of their high-tech GPU mining rigs becoming obsolete with the advent of PoS protocols. At the same time, dismantling is not so difficult as to cause large electricity consumption.
Bitcoin’s slow, archaic and environmentally harmful protocol is also finally being revised. In a rare act of solidarity, miners around the world have reached consensus for Bitcoin’s Taproot upgrade, which will allow the introduction of smart contracts on its network and which is due to go into effect in November. Bitcoin does not have a central development team, so it is up to a unanimous vote from miners to upgrade the world’s largest cryptocurrency. The last one happened four years ago.
Overall, investor fear, uncertainty, and doubt – known in the cryptocurrency world as FUD – about the sector is melting away very quickly in the second quarter as new innovations begin to address these issues. It looks like the next bull run for the cryptocurrency sector will begin.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.
