If last week was a mixed bag flatness for the largest parts, this week offered the first real signs of gains from the disaster of FTX spiraling into bankruptcy.
Bitcoin (BTC) has risen 2.7% in the past seven days and is currently trading at around $17,000. Its closest rival Ethereum (ETH) is up 6.7% and is trading for $1,285 at the time of writing, according to data from CoinGecko.
The two major cryptocurrencies appear to have embarked on a modest recovery, having started the week on a downward slope when news of civil unrest in China rattled risky assets like tech stocks and crypto. Protesters were demonstrating against the draconian COVID measures underway in the country, raising fears that the world’s second-largest economy could be disrupted.
The market also plunged on Monday after news that crypto lender BlockFi was bankruptcy filing. BlockFi is the latest in a long line of crypto companies to be hit with contagion following the collapse of crypto exchange FTX.
Assets at risk picked up on Wednesday when Federal Reserve Chairman Jerome Powell said in a speech that December would bring lower interest rate hikes. This signals the end of a cycle of hikes…three so far this year, each of the 75 basis points – which were the steepest since 1994.
Although the major currencies almost all recorded growth, the gains were mostly weak. However, several names benefited from turbocharged rallies, including Chainlink (LINK) – up 11% to $7.59, Uniswap (UNI) exploded 12% to $6.12 and Polygon (MATIC) was up 8 .4% to $0.922278.
Dogecoin (DOGE) has seen a staggering 21.5% rally and is trading close to 10 cents at the time of writing.
DOGE’s week-long rally was stimulated by a Tweeter from Twitter’s new CEO, Elon Musk, which includes slides from a Twitter talk he recently gave. A slide mentions “payments” but does not give details. However, it was enough to send the Doge Army into speculation that their favorite coin might be Twitter’s official digital currency; it is also, after all, Musk’s favorite.
Lawmakers and Regulators Speak Out on FTX
Lawmakers around the world continue to watch and debate space diligently, especially in the wake of the two biggest disasters of this year: Terra and FTX. On Monday, Brazil’s congress went a step further than most and passed a bill legally endorse crypto for payments for goods and services in crypto.
The bill, which still needs to be approved by the president, includes crypto and air travel rewards in the definition of “payment arrangements” under the supervision of the country’s central bank.
The next day, the European Central Bank published a damning article claiming that Bitcoin’s long price stabilization at around $20,000 before FTX collapsed could have been “an artificially induced last breath before the path of insignificance.
In the blog postECB director-general for market infrastructure and payments Ulrich Bindseil and adviser Jürgen Schaff also argue that “Bitcoin’s conceptual design and technological shortcomings make it questionable as a means of payment.”
Bitcoin-friendly U.S. Senator Cynthia Lummis (R-WY) is co-sponsoring a bipartisan bill called Responsible Financial Innovation Act calling for the Commodity Futures Trading Commission (CFTC) to be the primary regulator of the industry – said in a pre-recorded address at the Financial Times Crypto and Digital Assets Summit on Monday that FTX’s collapse highlights the need for Congress to “know more” about crypto.
Known as the “Bitcoin Senator” for her cryptocurrency advocacy on Capitol Hill, Lummis presented her bill as a “framework” for understanding how the FTX disaster could have been avoided.
She also noted that FTX was “heavily involved” in the drafting of the Digital Products Consumer Protection Act (DCCPA), which is supported by Senate Agriculture Committee Chair Sen. Debbie Stabenow (D- Mich.) and Sen. John Boozman (R-Ark.) — a bill that she says “needs to be rewritten in a way that’s more efficient and neutral about business models, but very, very focused on protecting consumers”.
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