This Week in Coins: Bitcoin, Ethereum Plunge as Crypto Market Loses $58 Billion

This week in coins. Illustration by Mitchell Preffer for Decrypt.

It was a week of overall losses, with holders of the two largest cryptocurrencies by market capitalization also hit by the bearish price action.

Market leader Bitcoin (BTC) has only depreciated 6% in the past seven days and is currently changing hands at $23,136, according to CoinGecko.

Ethereum posted a slightly lighter 7% loss over the same period to land at $1,604 at the start of the weekend.

Besides the market leaders, it was the same story across the board.

Polygon (MATIC) posted one of its biggest declines, losing 16.7% this week and trading at $1.27 at the time of writing. MATIC began its downward movement on Tuesday when news broke that Polygon Labs would lay off 100 employees (20% of its workforce) following restructuring.

The next day, Polygon users fell prey to false rumors that the blockchain was down for two hours.

Polygon later revealed that a few nodes on the network were temporarily out of sync, causing the independent chain explorer Polygonscan to fail. Since Polygonscan had not been updated with new Polygon blocks or transactions for a few hours, people mistakenly believed that Polygon itself had stopped.

Litecoin (LTC), Dot (DOT) and Cardano (ADA) also posted significant losses this week, ranging from 8% to 9%.

Solana (SOL) had spent most of last November and all of December in freefall due to its association with executives from the collapsed FTX stock market. Since New Year’s it has managed to contain losses, with assets falling just 1% this week. It was trading at $22.4 at the time of writing.

The main reasons why SOL managed to hold the fort this week were news of the impending migration of the Helium network to Solana and a marked increase in Solana NFT trading volumes.

Likewise the Uniswap (UNI) token held off the bears, falling just 1.4% over the week and currently selling for $6.61.

The token’s resilience may be due to the fact that users of Uniswap’s NFT market will be able to transact with UNI and any other Ethereum-based token from Wednesday.

New rules proposed in Hong Kong, Canada, US

Since the demise of several high-profile crypto companies last year, including Terra, Celsius, Three Arrows Capital, and FTX, crypto regulation has become a recurring topic of conversation for regulators around the world.

Regulators in Hong Kong, Canada and the United States took center stage in this week’s high-level crypto chat.

On Monday, Hong Kong’s Securities and Futures Commission (SFC) released a consultation document proposing “to allow all types of investors, including retail investors, to access trading services offered by licensed VA [virtual asset] trading venue operators.”

The proposal recommends that conditions be met before retail investors can trade crypto, including knowledge and risk assessments, and possible limits on how much exposure traders can get. The Commission also recommends that only “large capitalization virtual assets” be eligible for regulated trading.

Hong Kong Finance Minister Paul Chan on Wednesday called Web3 a “golden opportunity” for the special administrative region and pledged to “establish and lead a task force for VA”. [virtual assets] development, with members of relevant policy offices, financial regulators and market participants, to make recommendations on the sustainable and responsible development of the sector.”

That same day, Republican Majority Whip Tom Emmer (R-MN) introduced a bill proposing to ban the Federal Reserve from directly issuing a central bank digital currency (CBDC) to individuals, a move he said would violate the rights of Americans would erode. financial privacy.

The CBDC Anti-Surveillance State Act would also require the US central bank to report to Congress on its digital currency experiments.

The following day, the Federal Reserve released a new statement reminding banks of the risks of crypto exposure. The Fed was joined in this warning by government agencies, including the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).

Across the border in Canada that day, the Canadian Securities Administrators (CSA), made up of securities regulators from each of Canada’s 10 provinces and 3 territories, released a list of new requirements for crypto companies seeking to remain compliant.

Crypto traders in Canada are now prohibited from allowing customers to purchase or deposit “Value Referenced Crypto Assets” (VRCAs), or stablecoins, without the prior written approval of the CSA, which in this case means that issuers must ensure the stablecoin is fiat-backed.

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