This Week in Coins: Market Leaders Dip as Regulations Inch Closer to Becoming Reality

By Tim Hakki

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

For the first time in three weeks, most leading cryptocurrencies declined.

Bitcoin failed to make any progress after posting a 2022 high of $48,000 on March 28. The $807.7 billion market cap leader dipped 9% over the last seven days, trading at $42,506 as of this writing.

Similarly, Ethereum, the second-biggest cryptocurrency with a market cap of $387.7 billion, fell 8% to trade at $3,224. 

“Ethereum killer” Solana lost the most value among the top 40 this week. The speedy and energy-efficient Solana fell 21% and was trading for $111, though with a market cap of $36 billion, it still managed to hold seventh place, above rival Cardano, which did fair a bit better.

Like Solana, Cardano uses a more energy efficient proof-of-stake consensus mechanism to validate transactions. Cardano also uses smart contracts. It fell 12.3% over the week and was trading at $1.04.

Several cryptocurrencies that rallied last week posted notable losses this week: Terra’s LUNA fell 15.6% to $96.01, Avalanche dipped 18.5% to $84, and Polkadot and TRON both fell about 16%, currently worth $19.73 and $0.063, respectively. 

The only leading cryptocurrency that sustained a rally into this week was NEAR Protocol, which gained 6.2% to $16.83. 

The week’s news

Since crypto has a total market cap of $1.97 trillion, it probably won’t be disappearing anytime soon. And Jamie Dimon, CEO of investment banking giant JPMorgan, implied as much on Monday. 

In a letter to shareholders, Dimon wrote: "Decentralized finance and blockchain are real, new technologies that can be deployed in both public and private fashion, permissioned or not." Dimon’s letter also said JPMorgan is "at the forefront" of these innovations and mentioned the bank’s use of blockchain technology in its U.S.-dollar pegged stablecoin, JPM Coin.  

The prevailing theme across global crypto news this week was regulation. Crypto is coming under increased scrutiny as policymakers become more aware of potential risks posed by digital assets.

On Monday, Bloomberg reported that Bank of England Governor Andrew Bailey told attendees at a "Stop Scams" event, organized by the British central bank, that cryptocurrencies “create opportunities for the downright criminal.”

Bailey acknowledged the impact blockchain has made on fintech but said that cryptocurrencies are also the preferred choice of payment for cyber criminals: “You only have to ask the question: What do people committing ransom attacks usually demand payment in? The answer is crypto.”

However, the government of the United Kingdom is still keen to embrace cryptocurrencies. On the same day, the British government announced plans to become a “global crypto asset technology hub.”

The chief finance minister, Rishi Sunak, said in a prepared statement: “It’s my ambition to make the U.K. a global hub for crypto asset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate, and scale up in this country.”

Sunak’s primary measure would regulate stablecoins “as a recognized form of payment.” The British government is working with the Royal Mint to produce an NFT that will be issued by summer.

Back across the Atlantic, SEC Chair Gary Gensler on Tuesday told attendees at an annual conference at the University of Pennsylvania Carey Law School that he's asked his staff to work with the CFTC to find ways to "register and regulate platforms where the trading of securities and non-securities is intertwined.”

Gensler’s comments follow on President Joe Biden’s recent executive order, in which the president laid out a nationwide strategy for crypto regulation. The president called on agencies—the Securities and Exchange Commission and the Commodity Futures Trading Commission among them—to coordinate on crypto efforts.

On Wednesday, sports media giant ESPN signed a multiyear deal with Autograph, an NFT startup co-founded by Tampa Bay Buccaneers quarterback Tom Brady. ESPN’s NFTs, inspired by the cable channel’s Brady documentary, "Man in the Arena: Tom Brady," dropped the same day.

Elsewhere on Wednesday, Pennsylvania Senator Pat Toomey issued a draft of the Stablecoin Transparency of Reserves and Uniform Safe Transactions (TRUST) Act.

Under TRUST, only three types of entities would be eligible to issue stablecoins: a “money transmitting business” (or person) authorized by a state banking authority (or similar), a “national limited payment stablecoin issuer,” or an “insured depository institution.” Stablecoin issuers also would have to publicly disclose the assets that back them—be it cash reserves or anything else.

You can see how Toomey defines the terms and read the TRUST act here.

On Thursday, the SEC approved the fourth Bitcoin Futures ETF in the U.S.—The Teucrium Bitcoin Futures Fund. That same day, another U.S. federal agency, the Federal Deposit Insurance Corporation, issued a note to the banks it supervises warning them against crypto’s “evolving” and “not yet fully understood” risks. 

Finally, on Friday, the European Union expanded its existing sanctions against Russia to include “high-value crypto-asset services.”

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