As bitcoin soared past $28,000 on Wednesday and other major cryptos rode the wave of the green market, a small band of Ethereum enthusiasts jumped into action to ensure that the Ethereum Goerli test network would not be left behind. Led by the decentralized autonomous organization (DAO) GoerliDAO, the burgeoning movement seeks to use goerli ether (gETH) to maintain activity in the test network. Created to mimic a real-world blockchain network and allow for the testing of potential products, the Goerli test network has become a proving ground for major upgrades of the Ethereum blockchain.
The lawsuit filed by the US Commodity Futures Trading Commission (CFTC) against Binance on Monday rattled many investors, but concerns did not stop bitcoin from rising 21% in March, overshadowing other related assets such as ether, stocks, and gold.
“The market has reacted positively despite the CFTC story mostly because the broader narrative of a return to quantitative tightening (QE) and fiat printing remains dominant,” said Joe Dipasquale, CEO of crypto asset manager BitBull Capital.
Government agencies in the US have been fighting over the jurisdiction of certain cryptos. CFTC targeted Binance (trading the unregistered crypto derivatives) while the US Securities and Exchange Commission (SEC) Chairman Gary Gensler suggested that proof-of-stake tokens like ether be considered as securities.
Equity markets also edged up on Wednesday, with the S&P 500 and tech-heavy Nasdaq closing up by 1.4% and 1.7% respectively. James Lavish, managing partner at the Bitcoin Opportunity Fund, attributed the market surge to investors getting ready for several US data releases, such as the final fourth-quarter GDP figure on Thursday and the personal spending figures on Friday.
Lavish also noted that bitcoin was further lifted by China completing its first yuan-settled liquefied natural gas (LNG) trade with the United Arab Emirates. This “strengthens the argument that bitcoin may be used as a means of exchange in large cross-border energy trades in the near future”, he said.
The GoerliDAO group maintains that an incentivized canary network like Goerli would prove to have unique advantages, pointing to Kusama’s success in relation to Polkadot. With the preservation of Goerli on their agenda, they illustrate the potential of having such a test network to produce innovation and incentivization in the decentralized finance space.
At the time of writing, the crypto market index is up by 3.4% and Bitcoin and Ether are 1.7% and 1.8% higher respectively. Coinbase, a vital factor in the future of crypto, is preparing for a possible consolidation phase. Decentralized derivatives exchanges liquidation has been declining, but Perpetual Protocol open interest keeps increasing. Despite the overall crypto market rising, BUSD is falling due to mismanagement concerns and the wider stablecoin market is in a downtrend.
Nicholas Colas of DataTrek Research pointed out that the 2-year Treasury rate has been higher than that of the 10-year’s since July 2022, indicating “markets saw US monetary policy as restrictive”. Though markets do have the kindling for a recession call, a spark is still missing and is yet to be realized.
As traders’ eye US data releases closely in anticipation of the US Federal Reserve taking action, the future of Ethereum’s Goerli test network hangs in the balance. Whether GoerliDAO and its supporters can find a solution to keep the Goerli test net alive remains to be seen.
