Crypto Weekly Review May 22 – BTC Faces Another Weekly Loss

Key Insights:

• After a week for the crypto markets to forget, this was a week Terra co-founder Do Kwon may not forget.
• Regulatory chatter peaked, with the G7, UK, and US regulators targeting cryptos.
• China became the second largest Bitcoin (BTC) mining nation despite a mining ban.
• From the top ten, Binance Coin looks set to buck the broader crypto market trend, with a modest rise.

Following the previous week’s collapse of TerraUSD (UST) and Terra LUNA, regulatory chatter gathered momentum in the week to weigh on bitcoin (BTC) and the broader market.

The pickup in regulatory chatter didn’t take the spotlight from the increased scrutiny of stablecoins and Terraform Labs.

Do Kwon became the center of attention for a second consecutive week. It was a three-pronged attack for the CEO of Terraform Labs.

News hit the wires of a 100 billion won tax fine for tax evasion, an investor lawsuit for damages of 1.4 billion won, and South Korean prosecutors investigating Do Kwon for running a Ponzi.

January reports of South Korean prosecutors wanting to put crypto criminals away for life don’t bode well for Do Kwon.

The increased attention from lawmakers tends to test investor support for cryptos.

Bitcoin (BTC) Failed to Deliver a Broad-based Crypto Rebound

A bullish start to the week saw bitcoin (BTC) strike a Monday week high of $31,296 before hitting reverse.

The reversal saw bitcoin fall to a Wednesday week low of $28,610 before retesting resistance at $30,500.

For the week, bitcoin looks set for a 4% decline, which would mark an eighth consecutive weekly loss, its worst losing streak.

Market angst over Fed monetary policy and the economic outlook, with the renewed threat of more stringent regulatory oversight, tested support for bitcoin and the broader market.

The bearish sentiment was evident in the Bitcoin Fear & Greed Index, which fell to 8/100, its lowest level since March 2020.

While recovering to 14/100 on Sunday, the Index remained deep in the “Extreme Fear” zone.

Bitcoin’s decline was in line with the NASDAQ 100, which ended the week with a 3.82% slide.

Things were not much better for the rest of the crypto top ten.

Binance Coin Bucks the Broader Crypto Market Trend

In the week ending May 22, SOL and ADA are heading for losses of 12.5% and 9.0%, respectively, with DOGE (-7.2%), ETH (-5.4%), and XRP (-6.0%) also on the way to weekly losses.

BNB looks set to buck the trend, however, with a 2.7% gain.

The total crypto market cap fell from a start of the week $1,334 billion to a week low of $1,204 billion before partially recovering to $1,277 billion.

US Lawmakers and the G7 Look to Expedite More Stringent Regs

Without surprise, regulators remained front and center, with investors expecting a united response to the collapse of Terra LUNA and stablecoin TerraUSD.

G7: Officials resumed discussions on crypto regulations that ground to a halt in December 2020. Finance ministers called for crypto assets to fall under the same regulatory regimen as the rest of the financial system. Ministers called for tougher rules to combat money laundering and the disclosure of reserves.

UK: The UK’s Financial Conduct Authority (FCA) announced expediting plans to implement a regulatory framework for stablecoins. The UK Treasury will hand the FCA new powers to regulate crypto assets later this year.

US:

SEC Chair Gary Gensler talked of other cryptos mirroring Terra’s demise to harm investors. The SEC Chair did not predict a few failures but many. Gensler also pitched for additional resources to monitor the crypto industry after recently beefing up its enforcement team.

Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), raised concerns over the possible effect of a crypto crash on traditional assets and markets. Behnam also talked of adding resources and ramping up efforts to target crypto fraud and manipulation cases.

Capitol Hill quizzed lobbyists in the wake of the TerraUSD collapse to ascertain whether the UST collapse was avoidable and whether other stablecoins are at risk.

Crypto News Highlights of the Week

• Underground miners defied the Beijing mining ban, with China becoming the second largest Bitcoin mining nation based on new data.
• SEC filed its reply to support its claim that attorney-client privilege protects documents related to William Hinman’s speech.
• TAG Heuer partnered with BitPay to accept online crypto payments in the US.
• SWIFT Network began the exploration of cross-border CBDC payments.
• Ethereum Proof-of-Stake transition is slated for August 2022.
• Crypto FTX announced plans to introduce stock trading.
• Socios football Fan Tokens surged following listing news and Chiliz network updates.
• Crypto venture capital investor Andreessen Horowitz debuted a $600m Web3 gaming fund.
• UK Treasury to selectively legalize stablecoins as a means of payment.