This Week in Coins: Bitcoin, ICP and Solana Lead Small Market-Wide Rally

Most of the top thirty cryptocurrencies by market capitalization have appreciated in value over the last seven days, with Bitcoin (BTC), Solana (SOL), and the Internet Computer Project (ICP) leading the rally. 

Bitcoin is around 7.5% pricier than it was this time last weekend and trades for $29,295 as of this writing. 

On Monday, the world’s favorite cryptocurrency slipped down to $27,500, but on Wednesday, it reclaimed $29,000 after another potential insolvency rocked the traditional finance world; shares in First Republic Bank fell 50% on Tuesday, a day after its latest quarterly report revealed a marked decline in deposits. 

From Bitcoin’s whitepaper onwards, crypto has been pitched to the world as an alternative to the banking system. So, when TradFi institutions are in trouble, investors often flock to crypto—as happened last month when news of Credit Suisse’s insolvency pumped Bitcoin’s price. 

Bitcoin

The market’s second biggest cryptocurrency, Ethereum, only managed to add 2.7% to its value this week and currently trades for $1,906. 

The biggest rallies among leading cryptocurrencies came from Solana, which grew 11% and is now worth $23.35, and ICP blew up 16.6% to change hands at $6.58.

Holders of Cosmos Hub (ATOM) found their stashes increased this Saturday as the token rallied 8.5% over the week to trade at $11.68. 

Regulation

The glare from regulators’ headlamps has been intensifying recently as U.S. agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) continue to bring enforcement actions against the industry instead of new guidelines. 

On Monday, Democrat and California lower house lawmaker Matt Haney introduced Assembly Bill 1229, a legal framework for Decentralized Autonomous Organizations (DAOs) that would change state legislation to enable DAOs to incorporate and pay taxes in California while providing better safeguards for Californians participating in the Web3 economy.

The bill already has support from crypto investment firm Andreessen Horowitz and the Crypto Council for Innovation.

On Tuesday, news broke on Twitter that Binance US had walked away from a deal to acquire the assets of crypto lender Voyager, one of the high-profile casualties stemming from Terra’s collapse last May. In a statement to Decrypt, the exchange cited “the hostile and uncertain regulatory climate in the United States” as the main factor behind the decision to ax the deal. 

On Wednesday, reports emerged that Binance CEO Changpeng Zhao had hired lawyers to defend himself against multiple legal threats filed against him and his exchange by the SEC, the CFTC, and the Department of Justice.

That day, crypto-friendly Texas Senator Ted Cruz launched a diatribe against the idea of an American central bank digital currency (CBDC) during the Bitcoin Policy Summit. 

CBDCs are currently being researched by governments worldwide, including those of the U.S. and the EU. A CBDC is a stablecoin pegged to the local currency, and advocates say they would facilitate online payments while taking advantage of blockchain features like instant settlement and smart contracts. However, critics fear the result would lead to an increase in centralized control over our money, which goes against crypto’s very ethos. 

Cruz argued that U.S. leaders would use a CBDC “to destroy all value of Bitcoin, to destroy anonymity, to destroy decentralization.” He added: “The same people that want to see a CBDC, they hate Bitcoin, and they hate cash. Let’s be clear; they don’t like cash for exactly the reason I like cash because it is not subjected to centralized control that is not subject to constant surveillance. And so I hope we see growing resistance to a CBDC.”

CBDC skepticism is prevalent in Republican circles. Last month Florida Governor Ron DeSantis and Ohio Representative Warren Davidson echoed Cruz’s sentiments. 

Finally, at a Bloomberg event on Thursday, Hong Kong’s Securities and Futures Commission (SFC) CEO Julia Leung announced the special administrative region will launch its crypto licensing regime next month.

The new rules promise to let retail investors trade significant cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) with fewer restrictions from June 1.