At the start of the week, two big events put the brakes on the bull market. 

On Monday, President Joe Biden signed off on a $1.2 trillion infrastructure bill that lets the government collect taxes from crypto custodians—and could, confusingly and perhaps unworkably, require DeFi protocols to report information about their customers. 

That same day, Chinese authorities redoubled their efforts to clamp down on cryptocurrency mining in the country. Citing environmental concerns, government official Meng Wei said at a conference that the government would hike electricity prices for anyone caught using subsidized power to mine crypto. 

Bitcoin had been trading for around $66k on Monday morning, just shy of its all-time high of $68,789 set on November 10. But the news sent prices into a downward spiral. Prices dropped all week long, falling below $60k on Tuesday and bottoming out at $55k on Friday before bouncing back a little. Today Bitcoin trades for $58,541. 

BTC

-6.26%$77,273.06

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As usual with crypto, the price movements of Bitcoin–the largest cryptocurrency by market capitalization–are felt throughout the market. The day after the announcement, the market lost $300 billion as its market capitalization plummeted from $3 trillion to $2.7 trillion.

Before the crash, Ethereum had been trading close to its former all-time high of $4,859, set on November 10. It dropped 11.3% on Monday, sinking to $4,202. It had not been at this level since the end of October.  Today it trades at $4,317.

ETH

-30.86%$1,478.20

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It wasn’t all bad news for Ethereum this week. New filings from the United States Securities and Exchange Commission reported that the number of Grayscale Ethereum Trust shares are up 19% in Q3 this year, while institutional Bitcoin Trust shares dropped 2.6%. 

Altcoin roundup

Nearly every altcoin dropped this week. BNB, Solana, XRP and Polkadot all lost around 7% of their value in the last seven days. 

Among the memecoins, Dogecoin dropped 10% but its younger, trendier rival Shiba Inu only dropped 5%. Shiba Inu’s losses could have been mitigated somewhat by Gemini, the New York-based crypto exchange founded by Cameron and Tyler Winklevoss, which enabled SHIB trading on Monday.

Avalanche is the only top twenty crypto that soared this week. The much-touted “Ethereum killer” is up 35% from last weekend. It set a new all-time high of $120.06 in the last hour.

Over the past three months, the total value locked in DeFi protocols on the cheap and energy-efficient blockchain blew up more than tenfold from $1 billion to $11.77 billion, according to DeFi Llama, as a series of bullish developments–including a collaboration with Deloitte–helped raise the profile of the blockchain. 

Crypto has had a bearish week so far, but the success of Avalanche is a reminder that things often go against the grain in these markets.