Your guide to Bitcoin, Ethereum and Web 3.0
This week in coins. Illustration by Mitchell Preffer for Decrypt.
Knock on wood, but it’s two weeks into 2023 and crypto’s green shoots haven’t been cut yet.
None of crypto’s top 20 coins had significant losses this week. Bitcoin (BTC) and Ethereum (ETH) soared higher on encouraging signs that US inflation eased in December.
BTC pushed past $19,000 on Thursday for the first time since just before the collapse of the FTX in early November, thanks to news from the Bureau of Labor and Statistics that inflation had slowed to 6.5% for December, down from 7.1% the previous month. Markets (stocks as well as crypto) clearly took these trends to suggest that the Federal Reserve may soon slow its relentless escalation of interest rates to combat rising prices.
On Friday night, BTC continued its rally, crossing the $20,000 mark and erasing its FTX-requested losses. It’s up 23% in the past week to $20,899 at the time of writing, according to data from CoinGecko.
ETH saw similar gains, rising steadily from Wednesday on inflation reports. The world’s second largest cryptocurrency rose an encouraging 21% during the week, crosses the $1400 mark Thursday and sitting at $1,538 on Saturday morning. ETH had not seen such highs since November 8, when FTX cratered and took the crypto market with it.
Stocks followed suit, with the S&P 500 and Nasdaq both posting their best weekly gains since November.
While crypto traders certainly welcomed riding Wall Street’s wave, others advised caution.
“It is a worrying trend to see Bitcoin moving in lockstep with traditional financial indicators and stock markets,” said Laguna Labs CEO Stefan Rust Decrypt earlier in the week. “As we know, Bitcoin was founded to be an alternative financial system to Wall Street, and it feels like we may be losing our way.”
Meanwhile, the week’s biggest winners rose on crypto-specific news that was independent of macroeconomic trends.
AVAX, the original symbol of the Avalanche blockchain, shot up a whopping 29% on Wednesday alone, following news that developer Ava Labs will soon offer crypto infrastructure through a collaboration with Amazon Web Services. The development will see Amazon use its dominant position to encourage adoption of Avalanche across the public and private sectors. AVAX ended the week up 44% from Saturday morning.
Lido, the liquid stake protocol, saw similarly notable gains this week for Lid, due to encouraging developments on the Ethereum network.
Since Ethereum is merging transitioned Ethereum to a proof-of-stake system in September, network participants have been able to earn newly minted ETH as a reward for staking pre-existing ETH with the network. Lido is a leading service that allows users to pool their ETH and stake it to earn more; over $7 billion in ETH has been staked through the project.
But these users have not yet been able to withdraw their stake ETH. That opportunity will come with Shanghai, an upgrade to the Ethereum network that looks right on track for a March launch. With Ethereum’s core developers reports no problems with the rollout of the update, LDO went up 41% this week.
And then there is Solana. After a brutal stretch to end the year due to its close ties to the FTX ecosystem and Sam Bankman-Fried, SOL is on a comeback tour: it’s up 65% in the past seven days to $22.54 as of Saturday morning.
