This week in pieces: Bitcoin and Ethereum bounce back despite Vauld and Voyager woes

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This week in parts. Illustration by Mitchell Preffer for Decrypt

It’s been a great week for investors, as the value of nearly all of the top 100 cryptocurrencies by market cap rose, despite the lingering crypto winter exacerbated by insolvency issues at crypto lenders Vauld and Voyager.

Bitcoin has jumped over 12% in the past seven days to trade at $21,565 at the time of this writing, according to CoinMarketCap. Meanwhile, Ethereum saw an even bigger rally, adding more than 15% to $1,216.

Various flagships jumped over 20% over the week: Uniswap jumped 30% to $6.33, Polygon rebounded 26% to $0.59, and Avalanche added over 22% to hit 19 $.94. And Solana rebounded nearly 16% to $38.14.

Only one of the top 50 cryptocurrencies actually depreciated this week: UNUS SED LEO fell less than 1% to $5.73.

“Maybe not fully disclosed”

As prices rallied, industry news was replete with stories of Vauld and Voyager’s financial struggles, a week after Singapore-based crypto hedge fund 3AC filed for chapter 15 bankruptcy after failing to meet margin calls from lenders, and barely a fortnight after the lender Celsius froze withdrawals due to financial difficulties.

On Monday, Singapore-based Vauld announced he was suspend all withdrawalsdeposits and transactions due to “volatile market conditionsand “the financial difficulties of our main trading partners”. Since June 12, the company has faced withdrawals totaling $197.7 million. Revenues have recently plummeted, forcing the company to dismiss 30% of its staff last month.

Responding to news on Tuesday, crypto lender Nexo announced that it had signed an indicative term sheet acquire Vault, giving Nexo a 60-day exploratory period to perform due diligence. Pending a satisfactory outcome, Nexo will acquire up to 100% of the company and reorganize its operations to deepen its presence in Asia.

On Wednesday, the crypto broker Voyager filed for chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York. Voyager Stock plunged almost 12% on the news. The company revealed last month it had $661 million in exposure to 3AC.

It also emerged on Wednesday that Alameda Research, the company founded by FTX CEO Sam Bankman-Fried, which last month provided Voyager with a $500 million line of credit, owes broker $377 millionaccording to Voyager’s bankruptcy filing.

This led regulators in Texas and Alabama to announce that they investigating Voyager’s collapse. Joe Rotunda, director of enforcement at the Texas State Securities Board, Told Bloomberg: “What we’re seeing now is that a lot of these crypto lending companies may not have fully disclosed what they were doing upside down with investors’ money.”

Somewhere else

LDO token for Ethereum Lido staking solution has grown staggeringly 51% this week as Lido’s Staked Ether (stETH) token was slowly repainting. Lido’s staked ether is a big part of Celsius’ ongoing liquidity crisisbecause the lender had staked customer funds on Lido and currently holds at least $487 million worth of stETH in a public portfolioaccording to Nansen.

Staked Ethereum is issued by Lido to represent Ethereum that has been locked into the Ethereum Beacon chain, a network that will be merged into the Ethereum mainnet in the coming months in an upgrade to bring the entire network to one proof of stake consensus mechanism and, it seems, make the network 99.95% more energy efficient. After the merger, stETH will be exchangeable 1:1 against Ether, so many expect a full repeg.

Wednesday, Ethereum testnet Sepolia switched to proof of stake. Ethereum developers have now tested the merger on two public testnets, including Ropsten. There is only one testnet left (Goerli) before the entire network completes “The Merge”.

Registrations on the Ethereum Name Service (ENS) soared 216% last week, with 64,000 addresses created only on Sundays and Mondays. ENS is a decentralized domain name protocol on Ethereum that allows users to swap out their traditionally unwieldy wallet addresses for more memorable “.eth” domains.

Finally, the ProShares Bitcoin Short ETF (BITI) increased by 306% last week to become the second-largest Bitcoin ETF in the United States after ProShares’ own Bitcoin Strategy Futures ETF (BITO). BITI now holds net short exposure equivalent to 3,811 BTC, up from just 937 BTC on June 27, according to Arcane Researchwhile BITO holds around 32,000.

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