This Week in Coins: Bitcoin and Ethereum Lead Market Pullback as Dollar Rises
Illustration by Mitchell Preffer for Decrypt.
Despite a small midweek growth spurt on news that the US Labor Department’s inflation readings were lower than expected, Bitcoin (BTC) and Ethereum (ETH) entered the weekend with moderate losses over the past seven days.
Bitcoin is down 7.9% and is trading at $26,817. Even the news that the Principality of Liechtenstein will soon accept it as payments for government services failed to stop the largest cryptocurrency by market cap from posting a bigger loss than Ethereum this week.
Bitcoin has had to compete with a rising dollar this week. The cryptocurrency usually has an inverse relationship with the dollar, so the latter’s rise over the past two days has manifested itself in a decline in Bitcoin’s value.
Bitcoin usage for Ordinal’s NFTs also appears to be slowing, with trading volume falling 50% on May 11 and remaining well below range throughout most of May, according to Dune dashboard by blockchain analyst Domo.
Bitcoin transaction fees also took a short hit two years high on Tuesday when the average price reached $31.14, according to data from BitInfoCharts. That number is now back under $10.
Ethereum fell 5.8% over the seven days and is currently trading hands at $1,800. It’s one of the lighter falls in a week where damage was mostly small across the market.
Cryptocurrencies that fell more than 8% this week include Polygon (MATIC), which fell 11.5% to $0.856058, Avalanche (AVAX) fell 11% to $15.01, Toncoin (TON) fell 11.8% to $1, 85, and Internet Computer (ICP) fell 9.2% to trade at $5.16.
In the news…
On Monday, the American crypto exchange became Bittrex filed for Chapter 11 bankruptcy. The news comes weeks after the Securities and Exchange Commission (SEC) charged the company of failing to register as a broker-dealer, exchange and clearing agency, and said the agency received at least $1.3 billion in illegal revenue between 2017 and 2022.
Back in March, Bittrex so it wound down US operations, with CEO Richie Lai citing “the current US regulatory and economic environment” as reasons for the decision.
At a hearing in Washington on Wednesday, Republican and Democratic lawmakers failed to find common ground about the extent to which new regulation is necessary for digital assets. Their biggest difficulty is deciding whether a token should be considered a security or a commodity, if the former, then regulatory jurisdiction will be given to the SEC, if the latter will go to the Commodity Futures Trading Commission (CFTC).
That same day, Texas lawmakers voted overwhelmingly in favor an update to the state’s Bill of Rights to include people’s right to own, hold and use digital currencies. It is still a long way from being passed, and there is still one more vote in the House, one in the Senate and a popular vote.
Finally on Thursday, the US Chamber of Commerce criticized the SEC for its regulation-by-enforcement approach to the digital asset industry. It filed an amicus brief in support of Coinbase in the exchange’s pending court petition to get the Securities and Exchange Commission to clarify its rules.
“The SEC has intentionally muddied the waters by claiming sweeping authority over digital assets while implementing a haphazard, enforcement-based approach,” the chamber wrote. “This regulatory chaos is by design, not accident.”
