Why Uniswap, Elrond, Arweave, and Synthetix Network Popped Today

What happened 

The crypto market sprang to life on Thursday after Celsius Network filed for bankruptcy and Ethereum (ETH 12.40%) performed its ninth shadow fork, a test to get the blockchain ready for “The Merge” from a proof-of-work consensus mechanism to proof-of-stake. Not coincidentally, tokens on Ethereum were trading sharply higher today. 

As of 3:45 p.m. ET, Uniswap (UNI 11.81%) was up 20% in the last 24 hours, Synthetix Network (SNX 3.40%) has risen 15.4%, Arweave (AR 14.27%) is up 19%, and Elrond (EGLD 11.31%) has jumped 16%. Each of these tokens is either an ERC-20 token on Ethereum or has an ERC-20 token (Arweave). 

So what 

The biggest news for these tokens is Ethereum’s latest test of a proof-of-stake consensus mechanism. Developers did their ninth shadow fork test, and every time one of these tests is done it moves the blockchain closer to proof-of-stake. That’s important because if The Merge goes as planned, it could lower transaction fees dramatically and increase throughput on the blockchain. 

For now, the move in these cryptocurrencies isn’t really fundamental based on the underlying value of any of these blockchains, but rather is speculation that there will be more use cases and economic value long term. 

It’s notable that this move is taking place on a day when other asset classes aren’t up at all. The stock market is mixed today; gold is down 1.6%, and oil is barely hanging on to a gain of 0.1% today. Over the past nine months that would usually mean a sideways day for crypto values, but there’s enough bullishness to push almost every cryptocurrency higher. 

Now what 

Today’s move is just trading momentum, so I wouldn’t read too much into it. But investors do need to keep an eye on how well The Merge goes, because all of these tokens and underlying businesses are built on the idea that faster transactions and lower costs are eventually coming to Ethereum. 

I’ll also note that there’s general bullishness in cryptocurrencies because the Celsius Network officially filed for Chapter 11 bankruptcy, which brings some certainty to the crypto market. The company’s positions will be unwound and, for now, there may be a little less leverage in crypto. 

I think today is incrementally positive for cryptocurrencies, but wouldn’t read too much into the news. It’s still possible Ethereum’s upgrades are months away, and in the meantime, there are fewer users on Ethereum and users are moving to other, faster blockchains. I’m bullish on the crypto industry’s growth overall, but until there’s meaningful advances for any of these crypto projects it’s not worth buying the hype, because traders could reverse course tomorrow. 



This news is republished from another source. You can check the original article here

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