This Week in Coins: Bitcoin and Ethereum Lead Market Pullback as Dollar Rises

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This Week in Coins: Bitcoin and Ethereum Lead Market Pullback as Dollar Rises
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Illustration by Mitchell Preffer for Decrypt.

Despite a small midweek growth spurt on news that the U.S. Department of Labor’s inflation readings were lower than expected, Bitcoin (BTC) and Ethereum (ETH) entered the weekend with moderate losses over the last seven days. 

Bitcoin is down 7.9% and trades for $26,817. Even the news that the Principality of Liechtenstein will soon accept it as payment for state services could not stop the biggest cryptocurrency by market capitalization from posting a larger loss than Ethereum this week. 

Bitcoin has had to compete with a rising dollar this week. The cryptocurrency typically has an inverse relationship with the dollar so the latter’s rise over the last two days has manifested in a pullback in Bitcoin’s value. 

The use of Bitcoin for Ordinals NFTs also appears to be slowing down, with trading volume dropping by 50% on May 11 and remaining far short of its range throughout most of May, according to the Dune dashboard of blockchain analyst Domo.

Minergate

Bitcoin transaction fees also hit a brief two-year high on Tuesday when the average price hit $31.14, according to data by BitInfoCharts. That figure is now back under $10. 

Ethereum dipped 5.8% over the seven days and currently changes hands at $1,800. It’s one of lighter dips in a week where, broadly speaking, the damage was light across the market. 

Cryptocurrencies that dipped more than 8% this week include Polygon (MATIC), which fell 11.5% to $0.856058, Avalanche (AVAX) dropped 11% to $15.01, Toncoin (TON) sank 11.8% to $1.85, and Internet Computer (ICP) dropped 9.2% to trade at $5.16. 

In the news…

On Monday, American crypto exchange Bittrex filed for Chapter 11 bankruptcy. The news comes weeks after the Securities and Exchange Commission (SEC) charged the company with failing to register as a broker-dealer, exchange, and clearing agency and said the agency netted at least $1.3 billion in illicit revenue between 2017 and 2022.

Back in March, Bittrex said it was winding down U.S. operations, with CEO Richie Lai citing the “current U.S. regulatory and economic environment” as reasons for the decision. 

At a hearing in Washington on Wednesday, Republican and Democrat lawmakers failed to find common ground over the extent to which new regulation is needed for digital assets. Their main difficulty is deciding whether a token should be considered a security or commodity, if the former, then regulatory jurisdiction would be given to the SEC, if the latter, it would go to the Commodity Futures Trading Commission (CFTC).

That same day, Texas lawmakers voted overwhelmingly in favor of an update to the state’s Bill of Rights to include the right of the people to own, hold, and use digital currencies. It’s still a long way from being passed though, and still has to pass one more vote in the House, one in the Senate and a people’s vote.

Finally on Thursday The U.S. Chamber of Commerce slammed the SEC for its regulation-by-enforcement approach toward the digital asset industry. It filed an amicus brief in support of Coinbase in the exchange’s ongoing court petition to get the securities regulator to clarify its rules.

“The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach,” the Chamber wrote. “This regulatory chaos is by design, not happenstance.”

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