Bitcoin successfully tested the $79,500 mark, while the Ethereum Foundation issued warnings about potential failures in crypto wallets. Additionally, U.S. regulators unveiled new rules for crypto assets, marking significant events from the past week.

Market Rally

As of August 17, Bitcoin outperformed the stock market, having surpassed the S&P 500 only once in the last three months. This positive trend caught the attention of analysts at Glassnode.

CryptoQuant analysts noted signs of a revival in spot demand, suggesting a possible end to the bearish phase.

On August 20, Bitcoin prices surged nearly 8% within a day, nearing $70,000 for the first time in 11 weeks. The cryptocurrency continued its upward trajectory, crossing the $79,000 threshold, with Binance recording a price peak of $79,500 — a level not seen since mid-May.

Hourly BTC/USD chart from Binance. Source: TradingView.

This rally was accompanied by record liquidations of short positions. In the first 24 hours, the volume of forcibly closed positions approached $3 billion, with $2.7 billion attributed to shorts. The following days recorded $1.25 billion and $1 billion respectively.

Many analysts believe that the driving force behind this surge was a classic short squeeze in the market. A potential trigger for the rally was the U.S. Treasury's announcement of plans to at least double the volume of government bond buybacks as part of its liquidity support program.

After a brief correction, Bitcoin settled into a sideways trading pattern, maintaining levels above $77,000.

Over the week, Bitcoin's value increased by more than 22.5%. Most major altcoins outperformed the flagship cryptocurrency, with Ethereum rising by 29.3% (although it failed to maintain the $2,500 mark), XRP climbing around 50%, and HYPE and Dogecoin prices increasing by 41.3% and 32%, respectively.

Source: CoinMarketCap.

Spot Bitcoin ETFs recorded their largest weekly inflow since October 2025, totaling $1.92 billion.

Source: SoSoValue.

Ethereum-based ETFs attracted $697 million, marking the highest volume since fall.

Source: SoSoValue.

The crypto fear and greed index surged from 34 to 71 before correcting to 66. Such levels of "greed" were last recorded in early October.

Source: Alternative.me.

The total market capitalization of digital assets increased from $2.17 trillion to $2.62 trillion. Bitcoin's dominance rose to 59.2% (up from 58.8% the previous week), while Ethereum's share increased to 11.2% (from 10.5%).

Ethereum Foundation Issues Warning About Wallet Failures

The upcoming Glamsterdam update will modify the gas model, potentially causing some software to malfunction. The Ethereum Foundation (EF) issued this warning on August 17.

Developers believe wallets, indexers, and fee estimation tools could be affected. They have advised programmers to test their systems on the public testnet Plataberget.

The EF emphasized that tools with "hard-coded maximum gas limits" would cease functioning and require updates.

This issue is linked to EIP-8037, which introduces a separate state-gas measure for operations that create new states. Standard ETH transfers to existing addresses will retain a cost of 21,000 units, but sending coins to a new address will incur additional charges.

Developers have been urged to review smart contracts that assume a 21,000-unit fee covers all ETH transfers, as well as code that calculates fees solely based on gas quantity.

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U.S. Treasury Proposes Stablecoin Regulations Under GENIUS Act

The U.S. Treasury has unveiled a proposed regulatory framework for implementing the GENIUS Act, the first federal law governing payment stablecoins. This document outlines requirements for issuers, reserves, and oversight of digital dollar issuance.

The proposed Notice of Proposed Rulemaking from the department focuses on the practical implementation of the GENIUS Act's third section. It aims to clarify how the established legal regime for stablecoins — digital tokens primarily intended for payments and settlements — will function.

The GENIUS Act imposes stringent requirements for the backing of payment stablecoins, mandating that they be fully supported by reserves on a one-to-one basis, with a limited list of permissible assets that includes cash, bank deposits, and short-term treasury bonds.

The law also calls for regular reserve disclosures and independent audits. The core objective of this regulation is to ensure users can redeem stablecoins at face value and to mitigate risks to the financial system.

Solana Cuts Slot Time to 350 ms

The Solana team has implemented the first phase of reducing the average slot time from 400 ms to 350 ms as part of the SIMD-0525 improvement proposal.

Validators on the Agave v4.2 client have activated this initial step of a four-phase reduction. This marks the first decrease in slot length since the network's launch.

A slot is a fixed time window in which the leader validator forms a block. Shortening the slot is expected to expedite transaction confirmations. Future plans include further reductions to 300, 250, and 200 ms.

Each subsequent phase will have its activation mechanism and will be rolled out sequentially in later epochs. One epoch in Solana lasts 432,000 slots, or approximately two to three days. The approved schedule allows for halting the upgrade if the proportion of missed blocks increases.

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SEC Proposes New Rules for U.S. Crypto Market

The U.S. Securities and Exchange Commission (SEC) has introduced new regulations for the crypto market. The initiative, titled Regulation Crypto Assets, aims to simplify capital raising through tokens and establish a "safe harbor" for certain digital assets.

The regulator's proposal includes two exemptions from the standard registration requirements under the Securities Act of 1933.

The first exemption allows crypto companies to raise up to $5 million over four years, while the second permits raising up to $75 million in any 12-month period.

In both scenarios, issuers must disclose information to investors. The second mechanism will also require financial reporting and regular disclosures to the SEC.

Additionally, the SEC proposed a "safe harbor" for investment contracts. If certain conditions are met, a crypto asset may be exempt from the securities regulations.

A 60-day public comment period will commence following the project's publication in the Federal Register.

SEC Chair Gary Gensler emphasized that these rules will not replace legislation passed by Congress. He stated that a legislative framework will provide the market with more stable rules that will be harder to change under future commission leadership.

Further Reading

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We explored the real costs faced by leverage enthusiasts, the advantages and drawbacks of spot trading, and what historical data reveals about both market participant categories.

We examined why some tech elites are preparing for a scenario where conventional civilization ceases to function, how the "survival strategy" is constructed, and where rational risk preparation ends.

We discussed why labeling AI-generated content will harm "live" authors and complicate life for legitimate businesses, while not affecting spammers.

We gathered the most notable security events from the week in our traditional digest.