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Last week completed the transition from Ethereum blockchain protocol to proof of stake. Experts wonder if the blockchain has really improved, but at the same time, more is happening, investors are seeing ETH fall, something they didn’t expect.
The interest rate hike is scaring the market
The market is in free fall. This is the result of the Federal Reserve’s report. There was a higher than expected increase in consumer price index (CPI). This all happened last week, but investors fear a rate hike is on the way.
The fears were confirmed later, when the Federal Reserve announced it would add 75 basis points to interest rates. The Fed also has an update in the project ‘dot plot’ in which you will find everything about these figures until the end of 2025.
This forecast shows that interest rates will rise in the future, with the aim of reaching 4.4% by the end of this year and 4.6% by the end of 2023.
The Fed has taken an aggressive approach, raising interest rates and there is also reason to expect interest rates to rise again. Major cryptos, such as Ethereum, are also going to feel this kind of bad news and will suffer the consequences of a drop in value.
Investors play it safe
Investors reacted quickly after the announcement of the rate hike. Many immediately started selling crypto and moving it to a safe asset, such as a stock or an ETF.
In fact, according to data from CoinGlass, Ethereum has sold more than $150 million in the past 24 hours. So there is some serious pressure on the sale of ETH, especially when you see how few people are willing to buy the coin. Only then does it really become a problem and this was the case with Ethereum, which was bought for $1,224 in the last 24 hours.
Post-Merge Centralization Ensuring
There is an ongoing debate on the internet about the Merge of ETH and the consequences it will have on the foundation of the Ethereum blockchain. This also has a major impact on the recent price declines.
Shortly after the Merge, Martin Köppelman, the founder of Gnosis Chain, got a lot of attention in a tweet. He hereby informs that 1,000 of ETH’s first proof of stake blocks have gone into the crypto staking pool of Lido and Coinbase.
Ethereum developers framed the proof of stake in such a way that it would allow for more decentralization, better for the environment and safer than mining. For staking on the blockchain, 32 ETH is now required, only platforms such as Lido and Coinbase also allow participants without 32 ETH to strike. The problem is that these platforms own a large part of the blockchain.
But we should not jump to conclusions too quickly, the Merge is only a few days old. The security of the network is still being looked at by experts and it will be interesting how the network will perform in the long term.
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TAMA’s presale concluded earlier this week, with the team raising a whopping €19 million. This is very impressive and it managed to outperform crypto giant Ethereum in 2014. It shows how much demand there is for this top project.
In the coming weeks, TAMA is expected to be available from several central exchanges. The debut of Tamadoge and with many updates on the agenda, this is a good alternative for those looking for a crypto with a lot of potential.