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Those hoping for a 2023 Bitcoin bull run will have to keep waiting. Most of the leading cryptocurrencies posted pronounced losses in value over the past week, putting a damper on the near-continuous market gains seen since the start of the new year.
Bitcoin (BTC) took its biggest intraweek loss of the year so far. The world’s top cryptocurrency by market cap sank 7.5% over the last seven days to $21,760 at the start of the weekend, according to CoinGecko data. Ethereum, the No. 2 cryptocurrency by market cap, sank 8.5% this week to change hands at $1,524 at the time of writing.
Much of the bearish sentiment this week stemmed from U.S. regulators, who have kept hawkish eyes on crypto in the wake of several high-profile bankruptcies last year from firms like Celsius, Three Arrows Capital, and FTX.
On Wednesday, Coinbase CEO Brian Armstrong tweeted that he’d heard “rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers.”
Armstrong then defended the practice of Ethereum staking, whereby anyone with 32 ETH (about $50,000) can lock up their coins and start mining Ethereum. The Coinbase CEO argued that this does not make Ethereum a security.
By Thursday, the rumors were confirmed when the SEC announced it had hit Kraken with a $30 million fine and ordered it to shut down its staking service. The implications of this enforcement action are far-reaching.
As for the rest of the crypto market, one of the biggest drops in value among the top thirty coins this week came from Monero (XMR), a coin that facilitates private transactions. Monero sank 14% to hit $154 at the time of writing.
Avalanche (AVAX) similarly dropped by 13.5% and trades at $18.14 as of this writing. Popular memecoin Dogecoin (DOGE) also dropped 13% and currently sits at $0.082035.
Solana (SOL) faced the stiffest losses among top cryptocurrencies and shaved 17% of its market value to trade at $20.85 on Saturday.
Holders of Cardano (ADA), Litecoin (LTC), Cosmos Hub (ATOM), and Toncoin (TON) all saw their bags drop by 8%.
The only leading cryptocurrency that posted significant gains this week was the DAO token for crypto’s largest liquid staking protocol Lido Finance. LDO blew up 11% to $2.55 after the team released details of a major upgrade focusing on unlocking withdrawals on Ethereum and diversifying the network’s validators.
The upgrade still needs to be approved by a DAO vote, so LDO’s upward price action was likely spurred on by investors wanting to vote, in addition to those concerned about the future of Ethereum staking after the SEC's chilling action against Kraken. That move will likely continue to hang over crypto markets for weeks.