Crypto newsletter: Bitcoin popularity drops significantly

Cryptocurrency market  started last week in a negative mood as comments from Fed Chai Powell weighed on market sentiment.  During his speech at the Innovation Summit by the Bank of International Settlements (BIS), Powell called Bitcoin a "speculative asset," with no backing, and more of a "substitute for gold rather than for the dollar." He emphasized that private offerings like the pioneer cryptocurrency have failed to supplement the national fiat currency. Following his speech major cryptocurrencies fell sharply. Bitcoin's price dropped nearly 12.0%, from $57,480 to a low of $51,176 on Thursday. However, the downside movement has weakened after comments from  Elon Musk, who announced that Tesla's customers were able to make purchases using Bitcoin. Musk further stated that the BTC tokens received would not be converted to fiat since the firm runs its own Bitcoin nodes. Major cryptocurrencies rose during the weekend and managed to erase some of the recent losses. The capitalization of all digital assets in circulation currently stands at 1.819 trillion, while an average daily trading volume is registered at $113.2 billion. Bitcoin's market dominance decreased to 59.5%.

Fidelity looking to launch bitcoin ETF

Fidelity's subsidiary, FD Funds Management  filed a Bitcoin ETF proposal with the U.S. Securities and Exchange Commission. The fund will track the performance of bitcoin as measured by the Fidelity Bitcoin Index, which Fidelity created to track the price of the digital currency. The key question, however, is whether the SEC will approve the plan. The regulator has so far not granted any company permission to create a Bitcoin ETF, arguing that the market is not yet ready despite the growing number of applications.
Meanwhile, according to Google search data, Bitcoin popularity has dropped 45% over the last five weeks which may mean that this is not the end of the downward correction.

Hermes Network launches zk-rollups on Ethereum mainnet

Ethereum has been also trading under pressure last week, however Hermez Network's announcement that it had launched into mainnet its layer 2 scaling solution helped contain downside momentum. The project is expected to provide better scalability and cheaper transactions in the Ethereum protocol, which suffers from exorbitant gas charges. The network will initially support five projects including Ether, wrapped Bitcoin, Dai, Tether, and the Hermez token and should significantly reduce blockchain congestion.