Your guide to Bitcoin, Ethereum and Web 3.0
This week in coins. Illustration by Mitchell Preffer for Decrypt.
It was the third consecutive week of market-wide write-offs in 2023.
The consequences of the announced “winding up” of Silvergate Bank were still unfolding when Silicon Valley Bank failed. Market leaders Bitcoin and Ethereum saw big losses, but they weren’t the only losers: virtually all leading cryptocurrencies are down by double-digit percentages entering the weekend.
The markets were first disrupted by the demise of the crypto bank Silvergate. The writing was on the wall last week when the bank delayed filing its annual 10-k report with the United States Securities and Exchange Commission, prompting a sustained pull back in prices throughout the previous week.
Speculation continued Tuesday, when the White House press secretary said Washington was monitor the situation. The next day, Silvergate’s parent company announced that the bank was close operations. The news led to a sales across the entire market which sent the combined market value of all cryptocurrencies back under a trillion dollars.
By then, concerns about Silicon Valley Bank were already clogging the rumor mill.
According to CoinGecko price data, Bitcoin (BTC) is down 10.5% and is right at the $20,000 support level at the start of the weekend. It is at $20,055 at the time of writing.
Ethereum (ETH), the world’s No. 2 cryptocurrency by market cap, had a similar trajectory this week. It’s down 9.5% over the past seven days and starts the weekend around $1,425.
Similar losses of around 15% were posted by Polygon (MATIC), which is now worth $1.04, Polkadot (DOT) is worth $5.52, Shiba Inu (SHIB) is trading at $0.00001024, Avalanche (AVAX) is changing hands at $14.76, Uniswap (UNI) is worth $5.63, and Chainlink (LINK) is trading at $6.20.
The steepest losses this week (around 20% or more) were posted by Filecoin (FIL), which is currently worth $5.30, OKB is trading at $39.74, Solana (SOL) is changing hands at $17.74, and Dogecoin ( DOGE) is trading at $0.065269.
Regulators talk about risk, the environment and the digital dollar
US regulators were also in the spotlight this week as they aired their concerns about crypto.
On Monday, Federal Reserve Chairman Jerome Powell told lawmakers on Capitol Hill that while the U.S. central bank does not want to stifle innovation, regulated financial institutions must take “great care” when getting involved in the crypto space due to the prevalence of fraud and the lack of transparency in the space.
Elsewhere on Capitol Hill that day, the US Senate presided over what lawmakers have called the first-ever hearing on cryptomining’s environmental footprint. Senator Ed Markey (D-Massachusetts) presided increased from the Environment and Public Works Committee, saying that mining “deserves the spotlight” because it is “extremely energy-intensive” and enables the creation of “heavily concentrated wealth.”
Markey is also a sponsor of a bill push for more transparency from miners regarding their environmental impact.
On Wednesday, US Congressman Stephen Lynch (D-MA) questioned Jerome Powell when the latter testified before the House Financial Services Committee. Lynch asked Powell if a tokenized version of the US dollar would wipe out other cryptocurrencies.
Powell replied that he “never understood the appreciation of [cryptocurrencies]” and argued that they “have no intrinsic value, but nonetheless exchange for a positive number.” He refrained from speculating on the impact of a digital dollar.
That same day, Rostin Behnam, chairman of the Commodities and Futures Trading Commission (CFTC), told the Senate Agriculture Committee that Ethereum is a commodity. The CFTC is considered one of the most likely regulators of crypto, along with the SEC, but Benham’s opinion is at odds with SEC Chairman Gary Gensler, who has repeatedly made it clear that he sees all cryptocurrencies except Bitcoin as securities.
Finally, at a panel hosted by the Cato Institute on Thursday, Republican House Majority Whip Tom Emmer (R-MN) warned against a central bank digital currency (CBDC) on Thursday, arguing that the concept was a violation of American values of privacy, individual sovereignty and free markets.
“As the federal government seeks to maintain and expand the economic control to which it has become accustomed, the idea of the central bank’s digital currency has gained traction in the institutions of power,” Emmer said. “I am confident that American values will always prevail against the power-hungry whims of unelected bureaucrats.”
