The Ethereum network has moved one step closer to The Merge, where the network will transition from a Proof-of-Work consensus mechanism into a Proof-of-Stake (PoS) consensus mechanism after its Sepolia testnet successfully activated PoS.

Cryptocurrency exchanges have seen their Bitcoin balances drop by more than 20% from a January peak as the crypto winter deepens and investors move into a hodling mode where they self-custody their funds.

Luxembourg-based cryptocurrency exchange Bitstamp is removing its monthly inactivity fee that it was planning to charge users with smaller balances after widespread backlash from users.

Top stories in the Crypto Roundup today:

• Ethereum Moves Closer to Proof-of-Stake After New Testnet Merge
• Crypto Exchange’s Bitcoin Balances Drop Over 20% From Peak
• Bitstamp Drops Inactivity Fee Plan After User Backlash

Ethereum Moves Closer to Proof-of-Stake After New Testnet Merge

The Ethereum network has moved one step closer to The Merge, where the network will transition from a Proof-of-Work consensus mechanism into a Proof-of-Stake (PoS) consensus mechanism after its Sepolia testnet successfully activated PoS.

Sepolia is the second of three testnets to merge their Proof-of-Work execution layers with their PoS consensus layer before the upgrade is made on Ethereum’s mainnet. The Ropsten testnet successfully merged on June 8, and the next and final testnet dong so is Goerli.

Ethereum’s move to PoS is expected to both improve the decentralization of its nodes and reduce the network’s energy consumption by more than 99%. Developers are set to keep monitoring the Sepolia testnet to ensure it’s functioning normally after the merge and iron out potential bugs.

The Goerli testnet merge is expected to occur within the next three to four weeks, setting the stage for a potential mainnet merge in September.

Crypto Exchange’s Bitcoin Balances Drop Over 20% From Peak

Cryptocurrency exchanges have seen their Bitcoin balances drop by more than 20% from a January peak as the crypto winter deepens and investors move into a hodling mode where they self-custody their funds.

According to analysis by Glassnode, on-chain activity dropped by more than 13% in early July from November’s highs to levels last seen during the 2018 bear market. Crypto exchanges have seen their BTC balances drop more than 20% from a January 20 peak as investors move funds into cold storage.

In a newsletter, the firm wrote:

“Bitcoin has seen a near complete expulsion of market tourists, leaving the resolve of HODLers as the last line standing.”

Investors have also been moving coins off exchanges because of recent halts in operations at cryptocurrency lenders. Companies including CoinFLEX, Celsius, and Vauld halted withdrawals, while CoinLoan reduced withdrawal amounts, reducing investors’ confidence on centralized platforms.

In June, investors moved 223,000 Bitcoin off of cryptocurrency exchanges and into wallets they control.

Bitstamp Drops Inactivity Fee Plan After User Backlash

Luxembourg-based cryptocurrency exchange Bitstamp is removing its monthly inactivity fee that it was planning to charge users with smaller balances after widespread backlash from users.

The exchange planned to charge non-U.S. customers who had a balance of less than €200 a €10 monthly fee if 12 months elapsed where they hadn’t staked any assets or made any trades, deposits, or withdrawals.

The fee would have gone into effect on August 1 and was announced amid a steep decline in trading volumes throughout the cryptocurrency space after one of its worst sell-offs in history.

Users responded to Bitstamp’s inactivity fee announcement with calls to delete their accounts at the exchange. Some said the fee was a way to force traders with smaller balances to use the exchange, and others noted they were “disappointed” with the platform.

State of the Crypto by Top Tier Exchange Volume

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