It was the third consecutive week of depreciation across the market in 2023.
The repercussions of the announced "chill out" of Silvergate Bank were still being developed when Silicon Valley Bank failed. Market leaders Bitcoin and Ethereum suffered heavy losses, but they weren't the only losers: Virtually all of the leading cryptocurrencies fell by double-digit percentages before the weekend.
Markets were first rocked by the demise of crypto bank Silvergate. The writing was on the wall last week when the bank delayed filing its annual 10-k report with the US Securities and Exchange Commission, leading to a sustained pull back in prices throughout the previous week.
Speculation continued Tuesday, when the White House press secretary said Washington was monitoring the situation. The next day, Silvergate's parent company announced that the bank was closing operations. The news caused a liquidation of the entire market which returned the combined market capitalization of all cryptocurrencies below a trillion Dollars
At that time, concerns about Silicon Valley Bank they were already clogging up the rumor mill.
According to CoinGecko price data, Bitcoin (BTC) is down 10.5% and is sitting right at the $20,000 support level at the start of the weekend. It is at $20,055 at the time of writing.
Ethereum (ETH), the world's No. 2 cryptocurrency by market capitalization, had a similar trajectory this week. It is down 9.5% in the last seven days and is starting the weekend around $1425.
Polygon (MATIC) posted similar losses of around 15%, now worth $1.04, Polkadot (DOT) is worth $5.52, Shiba Inu (SHIB) is trading at $0.00001024, Avalanche (AVAX) changes hands at $14.76, Uniswap (UNI) is worth $5.63 and Chainlink (LINK) is trading at $6.20.
The steepest losses this week (around 20% or more) were recorded by Filecoin (FIL), currently worth $5.30, OKB trading at $39.74, Solana (SOL) changing hands at $17.74, and Dogecoin (DOGE) is trading at $0.065269.
Regulators talk risk, environment and the digital dollar
US regulators were also in the spotlight this week when they raised concerns about cryptocurrencies.
On Monday, Federal Reserve Chairman Jerome Powell told lawmakers on Capitol Hill that while the US central bank does not want to stifle innovation, regulated financial institutions must take โGood careโ when interacting with the crypto space due to the prevalence of fraud and lack of transparency in the space.
Elsewhere on Capitol Hill that day, the US Senate presided over what lawmakers have called the first hearing on the environmental footprint of crypto mining. Senator Ed Markey (D-Massachusetts) led the session of the Environment and Public Works Commission, and said that mining "deserves the limelight" because it is "extremely energy-intensive" and allows the creation of "very concentrated wealth."
Markey is also the sponsor of an invoice pushing for greater transparency from miners regarding their environmental impact.
On Wednesday, US Congressman Stephen Lynch (D-MA) questioned Jerome Powell when the latter testified before the House Financial Services Committee. Lynch asked Powell if a tokenized version of the US dollar would eliminate other cryptocurrencies.
Powell responded that he โI never understood the valuation of [cryptocurrencies]โ and argued that โthey do not have any intrinsic value, but nevertheless, they are exchanged for a positive numberโ. He refrained from speculating on the impact of a digital dollar.
That same day, Rostin Behnam, chairman of the Commodity and Futures Trading Commission (CFTC), told the Senate Agriculture Committee that ethereum is a commodity. The CFTC is considered one of the most likely regulators of cryptocurrencies, along with the SEC, but Benham's opinion is at odds with SEC Chairman Gary Gensler, who has repeatedly made it clear that he sees all cryptocurrencies except Bitcoin, as values.
Finally, in a panel hosted by the Cato Institute on Thursday, House Republican Majority Tom Emmer (R-MN) warned against a central bank digital currency (CBDC) on Thursday, arguing that the concept was an affront to American values โโof privacy, individual sovereignty and free markets.
โAs the federal government seeks to maintain and expand the financial control it has grown accustomed to, the idea of โโcentral bank digital currency has gained traction within institutions of power,โ Emmer said. "I am confident that American values โโwill always prevail against the power-hungry whims of unelected bureaucrats."
