This week in coins. Illustration by Mitchell Preffer for Decrypt
While long-term crypto holders are, broadly speaking, likely to be slightly down on their investments since last weekend, the reality is that markets barely moved the last seven days.
As of this writing, leading cryptocurrency Bitcoin had lost about 5% over the week to land at $23,216, while Ethereum had dropped about 0.32% to $1,714.
There were no notable price movements among the top 30 cryptocurrencies by market capitalization, except for Flow, which surged 33% to $2.64. What’s all the excitement about Flow? On Thursday, Instagram added support for Flow-based NFTs for users in more than 100 different countries. The announcement by Insta parent company Meta pushed up Flow’s price by 44% in a matter of hours that day.
In the news
Is the bear market at an end? Bank of America seems to think so. In the July edition of its Global Cryptocurrencies and Digital Assets report, the bank recorded an 11% rise in the digital asset market from June 29 to July 26, although this arrives at the end of a 56% year-to-date contraction in the market.
Over the same June/July period, according to the report, there was half a billion dollars in Bitcoin outflows from exchanges to wallets, potentially signaling a bull market as investors move crypto into storage to HODL.
The inflow to exchanges of the top four stablecoins (USDT, USDC, BUSD, and DAI) totaled about $1.4 billion over three consecutive weeks. Investors typically move stablecoins into exchanges so they can spend them on riskier digital assets, so this is another bullish signal.
On Tuesday, cloud software company MicroStrategy announced that its Bitcoin-loving CEO Michael Saylor would be stepping down after 33 years on the job. Phong Le, the company’s president, was picked to fill Saylor’s shoes.
Bitcoin Fanatic Michael Saylor Steps Down as MicroStrategy CEO
The changeover takes effect on Monday, and, according to Saylor, his new role as executive chairman will let him focus on expanding the company’s $2.8 billion Bitcoin treasury, the largest of its kind for a private company. In MicroStrategy’s Q2 earnings call, the company reported a $917 million impairment charge, meaning the firm is down about a quarter on the total investment, although that’s been public news for awhile.
Nor is Saylor alone. On Thursday, Block Inc., the payments company formed by Twitter founder and fellow Bitcoin maxi Jack Dorsey, reported a $36 million Bitcoin impairment loss in the second quarter. The company attributes this to “broader uncertainty around crypto assets.”
On Wednesday, a bipartisan group of American senators called the Senate Agriculture Committee introduced the Digital Commodities Consumer Protection Act. The bill proposes to grant the Commodity Futures Trading Commission “exclusive oversight” over whatever it deems as “digital commodities.” Significantly, the bill lists Bitcoin and Ethereum as commodities.
Last week, we learned that the CFTC was beefing up its technology team in preparation to potentially oversee crypto. This new legislative proposal from the Senate Agriculture Committee comes off the back of a bipartisan House bill that also calls for CFTC to be the industry’s chief regulator. The Responsible Financial Innovation Act was unveiled back in June and is cosponsored by Senator Kirsten Gillibrand (D-NY) and Senator Cynthia Lummis (R-WY).
Crypto also is fostering cross-party alliances in the U.K. On Thursday, the All Party Parliamentary Group (APPG) for the U.K. Crypto and Digital Assets announced that it’s seeking recommendations on how best to regulate crypto. The group will “focus on key policy issues in relation to the U.K. crypto and digital asset sector and […] wants to hear from crypto operators, regulators, industry experts, and Government on the need for regulation of the sector.”
Senator Warren Wants OCC to Withdraw Crypto Guidance for Banks: Report
That same day, it was reported that U.S. Senator Elizabeth Warren of Massachusetts is garnering support among colleagues on Capitol Hill for a letter that would ask the Office of the Comptroller of the Currency to withdraw the crypto guidance on which banks have relied.
The legal guidance targeted by Warren enables banks to hold deposits that act as reserves backing stablecoins. This lays the foundation for banks to potentially offer other crypto-related services. Warren is a hardliner when it comes to regulating crypto, and her letter reportedly asks the OCC to work with the Federal Reserve and Federal Deposit Insurance Corporation to develop a new approach.