First Mover Americas: Ether Outshines Bitcoin as Ethereum Merge Nears

• Price Point: Ether outperforms bitcoin as the Bellatrix upgrade was activated today which marks the beginning of the transition of Ethereum’s proof-of-work chain to the proof-of-stake Beacon Chain.
• Market Moves: CoinDesk's Shaurya Malwa looks into the sudden growth of Ethereum Classic, which is up 27% today.
• Chart of the Day: The staked ether (stETH) discount may widen as the Merge gets closer.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price point

Bitcoin (BTC) continued to trade below the $20,000 mark on Tuesday as stock futures inched higher following the Labor Day long weekend. Ether (ETH) outperformed bitcoin as Ethereum founder Vitalik Buterin tweeted that the Bellatrix hard fork would take place today. The Bellatrix will “prepare” the chain for the upcoming Merge.

Ether was up 7% over the last 24 hours, compared to bitcoin which was up 1%. Other altcoins also outperformed the world’s largest cryptocurrency on Tuesday, with ethereum classic (ETC) surging 27%. Avalanche’s AVAX was up 7% and Lido DAO, a liquid staking solution for Ethereum, was up 13%.

DeFi giant Aave stopped loaning ether ahead of the Merge. The community is worried that users might increasingly borrow ether ahead of the Merge, exposing the protocol to liquidity issues and injecting volatility into Lido’s staked ether market.

Traders are betting on tokens of decentralized exchange GMX as a proxy for Ethereum layer 2 solution, Arbitrum. GMX surged to a record high this week amid the rising interest from traders betting on the growth of Arbitrum.

Binance

On Monday crypto exchange Binance announced it will convert all USDC, USDP (Pax Dollar) and TUSD into Binance USD (BUSD), a USD-backed stablecoin issued by the exchange, on Sept. 29.

Binance announced in July an elimination of trading fees for all BTC-stablecoin pairs, which resulted in a significant increase in market share for the exchange.

Data from Kaiko shows that BUSD’s market share of stablecoin volume has hit an all-time high.

“The next steps for Binance and BUSD will be interesting: Will it attempt to encroach on USDC’s top spot in DeFi, or will it continue to focus on USDT’s centralized exchange dominance?” wrote Kaiko in a weekly newsletter.

“Given Binance’s success and growth, the answer may be both,” said Kaiko.

Market Moves

Ethereum Classic Hashrate, Prices Surge as Miners Prepare for Post-Merge Reality

By Shaurya Malwa

Ethereum Classic has emerged as an unlikely winner ahead of Ethereum’s Merge event scheduled for later this month, with network metrics surging to lifetime highs and ETC tokens gaining value in a mostly little-changed market.

The Ethereum Classic hashrate reached over 48.64 terahashes per second (TH/s) as of Tuesday morning, having surged more than 133% since July and overtaking the previous record of 28 TH/s set in April. A terahash is a unit that indicates the power of a computer or mining machine. A high hashrate is considered an indicator of security because it makes it harder and more costly to take over the network.

ETC tokens have added some 28% in the past 24 hours, rising to as high as $41 in early Asian hours before retreating slightly. Futures tracking the tokens logged some $27 million in liquidations in the same period – second only to Ethereum and ahead of bitcoin futures, which usually have the highest liquidations.

Why the sudden growth?

Ethereum Classic was formed after the DAO hack in 2016 caused a hard network fork that split the blockchain into two. The original chain continued as Ethereum Classic, while the new one was called Ethereum.

Ethereum went on to become the most-used blockchain in the world, locking up some $110 billion in total value on various applications at its peak in 2021. Growth on Ethereum Classic, on the other hand, remained tepid. Applications based on the chain locked up just over $1 million at the peak – and the network did not harbor any prominent decentralized finance (DeFi) application despite the sector’s outsized growth.

ETC prices did jump 10-fold during a two-month period in the 2021 bull market, but that movement came amid a speculative frenzy in the crypto market as opposed to solid fundamental growth.

Read the full story here.

Chart of the Day

stETH Discount May Widen as Merge Nears

By Omkar Godbole

• Staked ether (stETH) token representing one unit of ether (ETH) that has been locked in Lido's liquid staking service currently trades at 0.96 ETH.
• The discount may widen as some stETH holders may switch to ETH to receive potential Ethereum forked token ETHPOW.
• Ethereum, the world's largest smart-contract blockchain, may undergo a hard fork later this month, splitting into a proof-of-stake (PoS) chain and a proof-of-work (PoW) chain.
• The PoW chain will have ETHPoW as the native coin, which will be distributed to ETH holders for free.

Latest Headlines

• Three Arrows Capital Wallet Removes $33M of Staked Ether From Curve Pool: The removal of liquidity was the first activity from the wallet in 10 days.
• The Final Countdown to the Ethereum Merge Has Officially Begun: The activation of the Bellatrix upgrade on Ethereum triggers the beginning of the Merge, which will likely be completed sometime around Sept. 13-16.
• Traders Bet on GMX Tokens as Proxy for Ethereum Layer 2 Solution Arbitrum: Tokens of the GMX decentralized exchange almost doubled in the past two weeks even as broader market sentiment remains low.
• DeFi Platform Kyber Says It Removed Attack Vector, Compensated Affected Wallet: The Sept. 1 attack saw $265,000 stolen from one Kyber wallet.
• DeFi Giant Aave Stops Loaning Ether Ahead of Ethereum Merge: The Aave community is worried that users may increasingly borrow ether ahead of the Merge, exposing the protocol to liquidity issues and injecting volatility into Lido's staked ether market.
• Crypto Exchange Bybit Barred From Brokering Securities in BrazilAccording to the CVM, Brazil's stock exchange B3 is the only one authorized to intermediate securities in the South American country.