Cryptocurrency prices were essentially flat on Aug. 22 as the sector contended with inflation and Russia's grim prediction about the invasion of Ukraine.
Bitcoin, the most popular cryptocurrency, was off slightly to $21,237 at last check, according to CoinGecko, while ether, the native currency of the Ethereum platform, was essentially flat at $1,570 and dogecoin was little changed at $0.066857.
Bitcoin had reached the symbolic threshold of $25,000 on Aug. 15 but has since dropped nearly 13%.
"Summer rallies on extremely low volume in both traditional equities and digital assets are nothing new," Martin Hiesboeck, head of blockchain and crypto research at Uphold
"No one really expected this to last, least of all those who claim the ability to read the tea leaves of charts," he continued. "Bitcoin is down around 65% from its all-time high and that a bottom may be near, but not quite in."
Far more important, he said, is Russia's statements regarding the war with Ukraine.
Gennady Gatilov, Russia’s permanent representative to the United Nations in Geneva, told the Financial Times that Moscow sees no possibility of a diplomatic solution to end the war in Ukraine and expects a long conflict.
"In the US, the Fed has come under renewed attack from important voices that they hadn't done enough — and were still not doing enough — to stop inflation," Hiesboeck said. "Put those two together and we will see continued dollar strength – Euro is at parity again this morning — and in turn, Bitcoin weakness". 
Winston Ma, managing partner of CloudTree Ventures, said that ethereum, the second-biggest cryptocurrency, has been "massively outperforming" bitcoin.
The main reason for that, he said, is the market's high expectation for "the Merge”, where the platform will undergo a major update as it shifts from proof-of-work to proof-of-stake.
The Merge is expected to reduce ethereum's energy consumption, lower transaction fees (also known as gas fees), and make operations easier and more fluid. 
 "The shift from POW to POS is expected to make Ethereum more energy-friendly and more sustainable," said Ma, author of "Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse." "But the key question here is whether this merge will happen as scheduled? It is slated to take place on Sept. 15 after numerous delays. Is this time for real?"
On the regulatory front, David Lesperance, managing partner of immigration and tax adviser at Lesperance & Associates, said "stablecoin Tether’s founders are hearing the approaching footsteps of regulators and therefore have decided to up the quality of their auditors." 
In July, Tether started working with BDO Italia, an independent subsidiary of BDO LLP, the fifth largest accounting network globally, to issue quarterly attestations on the stablecoin operator’s reserves.
"Cayman Islands-based accounting firm MHA Cayman was Tether’s auditor and was much criticized as not being a Tier 1 audit firm," Lesperance said. "The entire crypto community including regulators are anxious for clarity on Tether’s 'Commercial Paper' holdings, in the audit which is expected imminently."
Separately, he said, "the U.S. Trustee office, the U.S. government’s bankruptcy watchdog, is taking the temperature of the collapse of crypto lender Celsius."
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Celsius Network filed for Chapter 11 bankruptcy on July 13, becoming a casualty of the cryptocurrency market crash that saw more than $2 trillion wiped out in less than nine months.
"Previously this was a step taken in high-profile restructurings of Enron and Lehman Brothers, both of which found executives bearing responsibility for the companies' demise," Lesperance said. "The U.S. Trustee office said there are 'numerous questions' about Celsius' operations and its financial health, as well as how its management allowed it to enter bankruptcy."
 In an Aug. 18, filing, the U.S. Trustee said " the market for cryptocurrency is relatively new, purposefully opaque, and, at best, loosely regulated."
"There is no real understanding among customers, parties in interest, and the public as to the type or actual value of crypto held by the Debtors or where it is held," the filing said.
Lesperance said the broad crypto market crash was exacerbated by the implosion of the TerraUSD stablecoin and its support cryptocurrency Luna.
"Celsius users have been warned they're unlikely to see much of the money back," he said. "While its likely that retail customers will see some return it could take up to 18 months and recoveries could be 'between 50 to 60 cents on the dollar'." 

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