For the first time in five weeks, the total market capitalization for crypto assets climbed above $1 trillion on Monday.
The relative milestone comes as three key crypto bankruptcy proceedings get underway and investor expectations around Ethereum's long-awaited merge continue to build.
Crypto's move to regain the trillion dollar market cap follows a catastrophic second quarter for the asset class.
Bitcoin (BTC-USD) changed hands above $22,000 for most of Monday morning, with its move over the last week nearing 10%. The world's largest cryptocurrency dropped nearly 60% from above $42,000 in late April to a low of $17,744 by June 18.
The Bitcoin Fear and Greed Index, an indicator crypto traders use to judge market sentiment around crypto’s largest coin has improved three-fold since June 18, when it registered the lowest level seen in the past four years.
However, the mood gauge still hovers at “extreme fear” levels.
Meanwhile, crypto's best story for the second half of 2022 might hinge on Ethereum's successful transition to proof-of-stake according to Matthew Hougan, chief investment officer for crypto asset manager, BitWise.
Ether (ETH-USD) is trading at $1,481 per coin and seen a 30% rise over the last week thanks in large part to growing optimism for its long awaited software transition.
"Ethereum will be the institutional asset of choice in the second half of the year and its on sale," Hougan said over email.
While the so-called merge still doesn’t have a hard timeline, Ethereum Core developer Tim Beiko suggested on Friday that if the final “dress-rehearsal” test slated for the first half of August proves successful, the official merge could occur the week of September 19.
After hitting a year to date low on June 18, ether has regained roughly 4% in market share, rising from below 14% to 17.7% as of Monday morning.
Noting the ether’s sizable rise relative to bitcoin’s decline in market share over the last four days, Noelle Acheson, head of insights with prime broker, Genesis Trading, said the shift suggests “a recovery in risk sentiment.”
Regaining trust in the courts
Along with 7-day price improvement, a number of crypto firms are still facing solvency issues that first began in late May following the collapse of the algorithmic stablecoin, TerraUSD.
Over the near-term, investors will be closely watching developments around three major crypto bankruptcies: Three Arrows Capital, Voyager Digital, and Celsius Network.
While the whereabouts of Three Arrows co-founders Kyle Davies and Su Zhu remain unknown, and Three Arrows owes both firms sizable amounts of money - $650 million to Voyager and $40 million to Celsius according to court documents - that could be used to repay the customers of both lending platforms.
Each lender's ability to pay back customers will have a significant impact on shaping the near-term prospects of whether American investors will be able to trust crypto firms with their funds.
One such customer, 43-year-old Matthew Yoder who had over 5 figures of cryptocurrency holdings with Voyager Digital, told Yahoo Finance after learning about Voyager's sizable loan to Three Arrows, he was surprised how reckless the company has been in dealing with customer funds.
"And I thought they were one of the safer ones," Yoder added.
The “first day hearing” of Celsius’ case is scheduled for 2 p.m. New York time Monday followed by a Voyager hearing requesting relief to continue operating its cash management system on Tuesday at 10:00 a.m. New York time.
Other cryptocurrencies, including BNB (+3.8%), XRP (+4%), ADA (+8.7%), SOL (+6.2%), DOGE (+6.5%), MATIC (+17.7%), AVAX (+10.5%) and Shiba Inu (+7.9%), have all seen a rise over the past 24 hours.