What happened
Bitcoin (CRYPTO:BTC), Ethereum (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 apiece, respectively.
Earlier in the day, Coinbase Global (NASDAQ:COIN), the second-largest cryptocurrency exchange in the world, announced it would be adding $500 million worth of cryptocurrency to its balance sheet. The move sent the whole sector into a monstrous rally. Coinbase stock is also up 3.10% to $255.98 per share in the same period.
Image source: Getty Images.
So what
It’s not just Coinbase’s big move that investors are happy about. On Aug. 19, the second-largest mortgage lender in the U.S., UWM Holdings, announced it would start accepting Bitcoin for home loans. The adoption could take effect by the end of the third quarter, and the company is also considering adding other cryptocurrencies like Ethereum into the mix.
Speaking of Ethereum, it was revealed on the same day that the Ethereum 2.0 staking contract had become the largest holder of Ether — at $21.3 billion. The news illustrates growing confidence in the Ethereum Foundation’s transition to its 2.0 network. By the end of 2022, Ethereum will run a proof-of-stake protocol, which its development team estimates will cut its energy use by 99% — essentially wiping out concerns about its environmental sustainability.
As for Dogecoin, the once-meme digital currency is growing in recognition. During popular discount brokerage Robinhood Markets‘ earnings release on Aug. 18, the company disclosed that Dogecoin accounted for 62% of cryptocurrency revenue in the second quarter. The same day, Ethereum’s founder Vitalik Buterin announced he would be joining the development team behind Dogecoin as a board member.
Now what
Dogecoin is leaving behind its reputation as a joke cryptocurrency. Since the beginning of the year, the number of merchants accepting Doge as payment has grown by 34.7% to 1,616. In addition, the network has found its unique niche due to its slight inflationary nature. Dogecoin miners do not face the threat of their high-tech GPU mining rigs becoming redundant with the rise of PoS protocols. At the same time, the mining isn’t so difficult as to induce heavy electricity use.
Bitcoin’s slow, archaic, and environmentally unfriendly protocol is finally getting an overhaul, too. In a rare act of solidarity, miners worldwide reached the consensus for Bitcoin’s Taproot upgrade, which will allow smart contract adoption on its network and is scheduled to take effect in November. Bitcoin has no central development team, so it’s up to a unanimous vote from miners to upgrade the world’s biggest cryptocurrency. The last one happened four years ago.
Overall, investors’ fear, uncertainty, and doubt — known in the cryptocurrency world as FUD — regarding the sector in Q2 are melting away very quickly as new innovations are beginning to address these issues. It’s looking like the start of the next bull run for the cryptocurrency sector.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.