Ethereum’s ‘reorg’ issue and other factors led to $237 million in liquidations amid 13% slump over one week

Fortune· Illustration by Fortune
Taylor Locke
2 min read
0

The fear gripping the crypto market is taking a toll on Ethereum.

Over the past week, Ether is down more than 13%, according to CoinGecko. It remains below its key level of $2,000, currently trading at around $1,774, and Ether futures saw $237 million in liquidations over the last day, as CoinDesk first reported, citing Coinglass data. That’s nearly twice the amount traders lost on Bitcoin-tracked futures.

There are several likely culprits.

As Ethereum readies for its highly anticipated “merge” upgrade, where its network will shift from proof of work to proof of stake, developers noticed a potential security risk on Wednesday: That day, Ethereum’s crucial Beacon chain, or proof-of-stake chain, experienced a “reorg” issue, meaning that the Beacon chain appeared to have briefly split in two and transactions were being processed on the split version of it.

“Client teams have been scrambling to understand the situation so they can figure out what to fix for the last couple of hours!” Ethereum cofounder Vitalik Buterin tweeted on May 25.

Things appeared to be back under control by Friday. Ethereum developers say they’ll share details of what happened publicly once they have a “high degree of confidence regarding the root cause.” But Ether’s price has since suffered, down 7% in 24 hours alone.

Additionally, Ethereum has also seen a decline in demand and user activity on its network in the past few months, which could be adding to the downtrend.

“Ethereum’s transaction volume is one-fifth of what it was a year ago,” down 80%, Lucas Outumuro wrote in Friday’s IntoTheBlock newsletter. “Decreasing NFT interest along with lower yields in DeFi have led to volumes dropping significantly. Other key metrics like fees and daily active addresses follow the same path.”

This is “in sync with the last bear market,” he wrote, “where on-chain activity decreased across the board. However, this has not stopped long-term believers to continue accumulating.”

Alongside Ethereum, the greater cryptocurrency market is down 3% in the past 24 hours. Bitcoin is currently trading at $28,878, struggling to hold $30,000. Altcoins like Cardano, Solana, and Avalanche are down 14%, 19%, and 25% in the past week, respectively.

This story was originally featured on Fortune.com

Advertisement

Recommended Stories

  • Trump ‘offered to block electric car rollout’ as he asked oil bosses for $1bn

    Donald Trump told oil industry executives he would dismantle Joe Biden’s pro-electric vehicle agenda as he asked for $1bn (£800m) to help return him to the White House, it has been claimed.

  • Billionaire Bill Gates Has 51% of His Portfolio Invested in 2 Brilliant Stocks

    The Bill and Melinda Gates Foundation Trust outperformed the S&P 500 by a wide margin over the past three years, in part because of these two stocks.

  • Can I Use My RMDs to Transfer Money Into My Roth IRA?

    If you're taking a required minimum distribution from an IRA, 401(k) or other tax-deferred account and don't need the money to cover living expenses, where should you stash that unneeded cash? Investors now need to start taking RMDs at age 73 or, if they were born after 1960, at age 75. Depending on the balances of […] The post Can I Use My RMDs to Transfer Money Into My Roth IRA? appeared first on SmartReads by SmartAsset.

  • Ask an Advisor: Can a Nursing Home Take Our IRA? We Have a $100K IRA and a Trust to Protect Our Assets

    My wife and I are elderly. I have an individual retirement account (IRA) worth about $100,000, and we have a trust set up through our children to protect our assets. If one or both of us have to go into … Continue reading → The post Ask an Advisor: Can a Nursing Home ‘Take Our IRA?' My Wife and I Are Elderly. We Have a $100K IRA and a Trust to Protect Our Assets. appeared first on SmartAsset Blog.

  • Dave Ramsey Shares Three Rules For Buying A House

    In today's turbulent housing market, navigating the path to homeownership requires a more strategic approach than ever. With soaring prices and high interest rates, prospective buyers face myriad challenges. But despite the complexities, financial experts like Dave Ramsey offer valuable insights to guide homebuyers through the process. Ramsey shared three rules for buying a house in a May 6 post on X: 1. Be debt-free. 2. Keep enough money in an emergency fund to cover three to six months of hous

  • One More Day, One More Boeing Incident - Senegal Crash Adds to Troubles

    Boeing Co (NYSE: BA) continues to face challenges as a Boeing 737-300 aircraft crashed during takeoff at Senegal’s main airport on Thursday. Air Sénégal flight HC301, operated by Transair with 78 passengers, skidded off a runway before takeoff, injuring 11 people and bringing the facility to a halt. The Blaise Diagne airport said an investigation was underway to determine the cause of the accident, which occurred at around 0100 GM, reported Reuters. Boeing is already under regulatory scrutiny af

  • Here's What Key Metrics Tell Us About Medical Properties (MPW) Q1 Earnings

    While the top- and bottom-line numbers for Medical Properties (MPW) give a sense of how the business performed in the quarter ended March 2024, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.

  • How Much Cash Can A $300,000 Annuity Generate For Me Each Month?

    Imagine having a reliable source of income you can count on throughout your retirement. That’s the promise of an annuity. These insurance products have been designed to turn your savings into a steady stream of monthly payments. They guarantee peace of mind and financial security in your golden years. Don't Miss: Are you rich? Here’s what Americans think you need to be considered wealthy. Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you. An

  • A 63-year-old peak boomer said she 'can't even think about retiring' despite having a master's degree and working two jobs

    Cathy, a 63-year-old clerical worker in Minnesota, fears she may never be able to fully retire, even though she's worked her entire life.

  • 1 Magnificent Dividend Stock Down 25% to Buy and Hold Forever

    A falling stock price has made Agree Realty an even more attractive passive-income investment.