Cryptoassets have again witnessed another up-and-down seven days, with price fluctuations hitting all assets, albeit demonstrating less volatility than last week. 

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Bitcoin (BITCOMP) yo-yoed between $28k and $31k throughout last week, but is now back to the $30,150 mark where it ended the week prior. Ether (ETH-X) has stayed relatively flat, trading currently around $2k, about $100 down on what it was this time last week.

However, the biggest headlines continued to be made by the fallout from terraUSD’s de-pegging from its fiat equivalent and its sister coin, Luna’s, subsequent loss of value. (UST-X, LUNA-X)

While the market faces its first sustained ‘jitter’ in nearly two years (mirroring the S&P 500 in bear market territory), it’s fair to expect there will be testing times ahead for many assets. The role of exchanges will be more pivotal than ever in helping budding investors reduce risk by providing access to those projects with the strongest use cases, as the squeeze on the cost of living starts to really bite disposable income. 

However, the good news is that previous bear markets have led to innovation, so whilst the headlines suggest doom and gloom, it could supercharge developments within the industry.

El Salvador’s BTC losses amount to next bond payment

Bitcoin’s price reduction has hit El Salvador’s reserves, with losses tantamount to the nation’s next expected payment to bondholders. 

Since becoming the world’s first government to make bitcoin legal tender last September, President Nayib Bukele has invested around $105 million buying BTC. Unfortunately, the cryptoasset's price has declined 45% since the first purchase, reducing the value of the holding by $66 million. 

This has led to losses of roughly $40 million, according to Bloomberg, which is a little more than the country’s next payment on its foreign debt, with $38.25 million due in June.

However, price volatility does not appear to be deterring governments too much. The UK Treasury last month announced plans for stablecoins to be recognized as a valid form of payment – all part of its wider plans to make Britain a global hub for cryptoasset technology and investment. So, while there may be lots to learn from El Salvador’s experiment, it does not spell the end for state interest in crypto and its growing use in mainstream payments.

Grayscale’s Future of Finance ETF comes to Europe

European investors can now get exposure to crypto companies via Grayscale’s Future of Finance ETF, which is now available on the London Stock Exchange, Borsa Italiana, and Deutsche Börse Xetra.

Previously only available to US investors, the fund is based on the Bloomberg Grayscale Future of Finance Index, tracking a selection of financial services companies “projected to be leaders of the emerging digital economy.”

Although the fund’s price has dipped since its inception, many of its investors are arguably focused on the long-term value of the industry. Therefore, European investors may well decide to take on some exposure while they can at these lower prices. 

Cloudflare experiments with ETH to ‘build a better internet’

Cloudflare (NET) is set to launch Ethereum validator nodes over the next few months as part of its commitment to environmental sustainability and to help “build a better internet”. The firm is set to fully stake the validator nodes as part of the project - 32 Ether (ETH) required per node - over the next few months. 

Ahead of Ethereum’s highly anticipated switch to proof-of-stake, Cloudflare will study energy efficiency, consistency management and network speed of the PoS network, as it experiments with the “next generation of Web3 networks that are embracing proof of stake”, ETH being the first.

Barring any delays, the merge and transition to a PoS consensus mechanism will go live in the second half of the year, with Cloudflare suggesting that this will provide “significant energy efficiency improvements” for the network.

While Web3 has been criticized for its energy consumption, it’s intriguing to see tech giants come together to help solve the issue.