This Week in Pieces: Bitcoin and Ethereum Erase Gains, 3AC Files for Bankruptcy

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This week in parts. Illustration by Mitchell Preffer for Decrypt

30% gains from Bitcoin and Ethereum Last week were short-lived as both market leaders depreciated by more than 10% over the past week, with Bitcoin falling below the key $20,000 support level.

The world’s favorite cryptocurrency, at the time of this writing, was only trading for $19,203, and its main rival, Ethereum, suffered bigger losses, dropping around 15% over the course of the year. week at $1,045.

Several top cryptocurrencies posted notable losses this week, including Polygon and Near Protocol, each down 22%, to $0.47 and $3.30, respectively. Avalanche fell 23% to $16.32, Solana fell 23% to $32.63 and Polkadot fell 18% to $6.80.

Virtually all of the top 30 cryptocurrencies recorded double-digit percentage losses except for UNUS SED LEO, TRON and Dogecoin. LEO fell 1.5% to $5.77, while Dogecoin also fell 1.5% to $0.06719. Meanwhile, TRON only depreciated 0.69% this week to $0.06485.

3AC files for bankruptcy

There was little room for optimism in the week’s news, most of which only confirmed fears that the sector was entering a recession.

More details emerged Monday on the insolvency from Singapore-based crypto hedge fund Three Arrows Capital (3AC), with reports that crypto broker Voyager Digital had served 3AC with a Notice of Default for failing to repay part of its debt of $673 million on loans of 15,250 Bitcoin and $350 million in USDC.

Wednesday, Sky News reported that 3AC was ordered to liquidate by court order in the British Virgin Islands (BVI), and that management consultancy Teneo would assist in the insolvency proceedings.

Bloomberg reported on Friday that 3AC had filed for chapter 15 bankruptcya calculated move to protect 3AC’s US assets during the BVI liquidation.

The Bitcoin Bear Race

Monday, a report by digital asset manager Coinshares revealed that Bitcoin-specific outflows last week totaled $453 millionroughly equal to all inflows over the past six months and the highest dollar amount on record.

According to CoinShares, last week’s outflows were the third largest on record in terms of assets under management (AUM), accounting for 1.2% of all AUM of all funds tracked by CoinShares. (The worst percentage outflows, 1.6%, were during the 2018 bear market.)

Also on Monday, Coinbase shares fell 9% to $56.88 after Goldman Sachs downgraded the company. from “neutral” to “sell” and lowered its price target from $70 to $45. Coinbase recently said he would shoot 18% of its workforce in addition to cancel certain job offers incoming employees, but analysts said additional measures would be needed to stem future losses.

On the same day, SEC Chairman Gary Gensler reaffirmed in a interview with CNBC his agency’s view that Bitcoin is a commoditynot a title, but refrained from extending the label to any other cryptocurrency.

gensler said Bitcoin is an example of a crypto asset that should be regulated by the Commodity Futures Trading Commission (CFTC), such as he said earlier. The previous SEC administration also considered Ethereum a commodity.

On Wednesday, the SEC rejected Grayscale’s application for a Bitcoin Spot ETF, saying the digital asset management giant had failed to do enough to protect investors from “fraudulent and manipulative acts and practices.” The following day, Grayscale CEO Michael Sonnenshein announced on Twitter that his company was take legal action against the Securities and Exchange Commission.

In total, the past three months have been so bearish for Bitcoin that the market leader posted its second-worst quarterly performance. already. That’s fine for some, though. Bitcoin whales, like the CEO of MicroStrategy Michael Saylor and the authoritarian president of El Salvador, Nayib Bukeleare buy the dip.

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