This Week in Coins: Bitcoin, ICP and Solana Lead Small Market-wide Rally
This week in coins. Illustration by Mitchell Preffer for Decrypt.
Most of the thirty largest cryptocurrencies by market capitalization have risen in value over the past seven days, with Bitcoin (BTC), Solana (SOL), and the Internet Computer Project (ICP) leading the rally.
Bitcoin is around 7.5% more expensive than it was this time last weekend and is trading at $29,295 at the time of writing.
On Monday, the world’s favorite cryptocurrency slipped to $27,500but on Wednesday, it recovered $29,000 after yet another potential insolvency rocked the traditional financial world; shares of First Republic Bank fell 50% on Tuesday, a day after the latest quarterly report revealed a marked decrease in deposits.
From Bitcoin’s whitepaper onwards, crypto has been presented to the world as an alternative to the banking system. So when TradFi institutions are in trouble, investors often flock to crypto – as happened last month when news of Credit Suisse’s insolvency broke pumped Bitcoin’s price.
Bitcoin
The market’s second largest cryptocurrency, Ethereum, only managed to increase its value by 2.7% this week and is currently trading at $1,906.
The biggest gains among leading cryptocurrencies came from Solana, which grew 11% and is now worth $23.35, and ICP exploded 16.6% to change hands at $6.58.
Holders of Cosmos Hub (ATOM) saw their holdings increase this Saturday as the token rose 8.5% on the week to trade at $11.68.
Regulation
The glare from the regulators’ headlamps has intensified recently as US agencies enjoy The Security and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) continues to bring enforcement actions against the industry in lieu of new policies.
On Monday, the Democrats and California lower house lawmaker Matt Haney introduced Assembly motion 1229a legal framework for Decentralized Autonomous Organizations (DAOs) that will change state law to enable DAOs to incorporate and pay taxes in California, while providing better protections for Californians participating in the Web3 economy.
The bill already has the support of crypto investment firm Andreessen Horowitz and the Crypto Council for Innovation.
On Tuesday, there was news on Twitter that Binance US had passed away from a deal to buy the assets of crypto lender Voyager, one of the high-profile casualties stemming from Terra’s collapse last May. In a statement to Decryptthe exchange cited “the hostile and uncertain regulatory climate in the United States” as the main factor behind the decision to remove the deal.
On Wednesday, reports appeared that Binance CEO Changpeng Zhao had hired lawyers to defend against multiple legal threats against him and his exchange by the SEC, CFTC and the Department of Justice.
That day, crypto-friendly Texas Senator Ted Cruz launched a critique of the idea of a digital US central bank currency (CBDC) during Bitcoin Policy Summit.
CBDCs are currently being investigated by governments around the world, including those of the United States and the European Union. A CBDC is a stablecoin tied to the local currency, and proponents say it will facilitate online payments while taking advantage of blockchain features such as instant settlement and smart contracts. However, critics fear that the result will lead to an increase in centralized control over our money, which goes against crypto’s ethos.
Cruz claimed that US leaders would use a CBDC “to destroy all value of Bitcoin, to destroy anonymity, to destroy decentralization.” He added: “The same people who want to see a CBDC, they hate Bitcoin, and they hate cash. Let’s be clear; they don’t like cash for the exact reason I like cash because it’s not subject to centralized control that doesn’t is subject to constant monitoring. And so I hope we see growing opposition to a CBDC.”
CBDC skepticism is widespread in Republican circles. Last month Florida Governor Ron DeSantis and Ohio Representative Warren Davidson echoed Cruz’s sentiments.
Finally, at Bloomberg event on ThursdayHong Kong’s Securities and Futures Commission (SFC) chief executive Julia Leung announced that the special administrative region will launch its crypto licensing regime next month.
The new rules promise to allow retail investors to trade significant cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) with fewer restrictions from 1 June.
