Monthly report of September 2022

This monthly report reviews the most important cryptocurrency news in September, focusing on the Ethereum Merge, the collaborations initiated by Chainlink and Polygon, the positive development of USDC, and the involvement of institutional players in the cryptocurrency market.

              
September in the cryptocurrency market
The prices of cryptocurrencies were mainly down in September. Of the cryptocurrencies offered by Northcrypto, Chainlink was the most successful, with its price rising by more than 15 percent during the month. The prices of Bitcoin and Litecoin ended up at the end of the month almost at the same level as they had been at the beginning of the month. On the other hand, the price of Polygon fell by about five percent, while the price of Ethereum and Aave fell more than ten percent.
 
The Ethereum Merge was successful
The long-awaited Ethereum Merge, i.e., the transition to the Proof of Stake algorithm, took place successfully on the 15th of September. You can read more about the Merge and its effects in our latest blog post.
 
Significant collaborations initiated by Chainlink and Polygon
At the SmartCon 2022 conference organized by Chainlink at the end of September, a very significant collaboration for Chainlink was announced. Chainlink started a collaboration with the interbank data transfer network Swift. Swift is the most used data transfer network for cross-border bank transfers and is used by more than 11,000 banks. In collaboration, Chainlink and Swift are working on a Proof of Concept (PoC) project that would allow actors in the traditional financial world to make transactions on blockchain networks. A PoC project is the first step in product and service development to find out if an idea works in practice. The project utilizes Chainlink's Cross Chain Interoperability Protocol (CCIP), which enables the operation of smart contracts, data transfer, and token transfer between different blockchains. 
 
There was positive news about the scalability solution Polygon in September, as Polygon started a collaboration with the world's largest coffeehouse chain, aka Starbucks. Through the collaboration, members and employees of Starbucks's loyalty program can, among other things, earn and purchase "digital stamps" in the form of NFTs. These NFTs, in turn, open up access to new perks and immersive coffee experiences. Starbucks chose the Polygon blockchain because of its speed, low costs, and carbon neutrality. Starbucks has more than 34,000 coffeehouses in 80 countries.
 
USDC’s technical advancement and compatibility with five new blockchains
Circle, the company behind the dollar-linked stablecoin USDC, released a Cross-Chain Transfer Protocol (CCTP) in September, which makes it easier to transfer USDC between different blockchains. In addition to the new protocol, USDC will become compatible with five new blockchains early next year: Arbitrum, Cosmos, NEAR, Optimism, and Polkadot. Until now, USDC has been compatible with nine blockchains, which include Ethereum and Polygon, among others.
 
Institutional players' involvement in the cryptocurrency market
Institutional interest in cryptocurrencies continued to grow in September as well. According to Bloomberg, which specializes in financial news and data, the Nasdaq behind the Nasdaq stock exchange, is creating a unit specializing in cryptocurrencies. According to Tal Cohen, the executive vice president of Nasdaq, who provided Bloomberg with the information, the unit will initially develop a custodial service for institutional clients for Bitcoin and Ethereum.
 
According to information obtained by the financial magazine The Wall Street Journal, US asset manager Fidelity Investments is planning to offer bitcoin trading services to its retail clients. Fidelity started offering bitcoin to hedge funds and institutional investors back in 2018, and now, Fidelity is considering making the service available to its more than 34 million retail investors as well. Fidelity is one of the world's largest asset managers and manages assets worth around € 3.7 trillion.
 
Summary
The Ethereum Merge was the most significant event in the cryptocurrency world in September. Although the Merge did not immediately affect positively in the price of Ethereum, many believe that this will happen in the future. Also, it is good to remember that the Merge did not make Ethereum ready, for example, the implementation of sharding technology, which significantly increases the scalability of the blockchain, is still ahead.
 
Chainlink's collaboration with Swift reflects the ever-growing interest in cryptocurrencies and blockchain technology among players in the traditional financial world. On the other hand, Polygon's collaboration with Starbucks concretely illustrates the possibilities of utilizing cryptocurrencies and blockchain technology in everyday life. The USDC stablecoin which was added to Northcrypto's offering at the beginning of the year continues to develop and expand. CCTP and expansion to five new blockchains will help Circle in its goal of making USDC the largest stablecoin by market cap.
 
There have been several recent examples of institutional players' interest in cryptocurrencies. BlackRock news in August was followed by positive news about institutional players joining the cryptocurrency market in September. The ever-growing interest of the major institutional players does not come as a surprise to many. The major players see a growing demand for this new asset class and also understand the future potential of cryptocurrencies. For this reason, they are likely to think the following: there is less risk of entering the cryptocurrency market than of opting out altogether.

Ville Viitaharju
Cryptocurrency specialist