This Week in the Pieces: Firms Report Big Bitcoin Depreciation Charges, But Markets Generally Shrug

This Week in the Pieces: Firms Report Big Bitcoin Depreciation Charges, But Markets Generally Shrug
This week in parts. Illustration by Mitchell Preffer for Decrypt

While long-term crypto holders are, in general, likely to be slightly down on their investments since last weekend, the reality is that markets have barely moved in the past seven days. .

As of this writing, major cryptocurrency Bitcoin lost around 5% over the week to land at $23,216, while Ethereum was down around 0.32% to $1,714.

There were no notable price moves among the top 30 cryptocurrencies by market cap, except for Flow, which jumped 33% to $2.64. What’s all the excitement about Flow? On Thursday, Instagram added support for Flow-based NFTs for users in over 100 different countries. The announcement from Insta’s parent company Meta sent Flow’s price up 44% in a matter of hours that day.

In the news

Is the bear market over? Bank of America seems to think so. In the July edition of his Global Cryptocurrencies and Digital Assets report, the bank recorded an 11% rise in the digital asset market from June 29 to July 26, although that comes at the end of a 56% year-to-date contraction in the market.

During the same June/July period, according to the report, there was half a billion dollars in Bitcoin outflows from exchanges to wallets, potentially signaling a bull market as investors move the crypto into storage. to HODL.

The inflow to exchanges of the four major stablecoins (USDT, USDC, BUSD, and DAI) totaled around $1.4 billion over three consecutive weeks. Investors typically move stablecoins around exchanges so they can spend them on riskier digital assets, so this is another bullish signal.

On Tuesday, cloud software company MicroStrategy announced that its CEO, Bitcoin enthusiast Michael Saylor, would step down after 33 years on the job. Phong Le, the company’s president, was chosen to replace Saylor.

The changeover takes effect on Monday and, according to Saylorhis new role as executive chairman will allow him to focus on expanding the company’s $2.8 billion bitcoin treasury, the the largest of its kind for a private company. During MicroStrategy’s second quarter earnings call, the company reported a Impairment charge of $917 millionmeaning the company is down about a quarter on total investment, although this has been public news since some time.

Saylor is not alone either. On Thursday, Block Inc., the payments company formed by Twitter founder and fellow Bitcoin Maxi Jack Dorsey, reported a $36 million loss in bitcoin value in the second trimester. The company attributes this to “greater uncertainty around crypto assets.”

On Wednesday, a bipartisan group of U.S. senators called the Senate Agriculture Committee introduced the Digital Products Consumer Protection Act. The bill proposes to grant the Commodity Futures Trading Commission “exclusive control” over anything it considers “digital products”. Significantly, the bill lists Bitcoin and Ethereum as goods.

Last week, we learned that the CFTC was strengthens its technology team in preparation to potentially oversee crypto. This new legislative proposal from the Senate Agriculture Committee follows a bipartisan bill that also calls for the CFTC to be the primary regulator of the industry. Responsible Financial Innovation Act was unveiled in June and is co-sponsored by Senator Kirsten Gillibrand (D-NY) and Senator Cynthia Lummis (R-WY).

Crypto is also encouraging cross-party alliances in the UK Thursday, the All-Party Parliamentary Group (APPG) for the UK Crypto and Digital Assets has announced that it is looking for recommendations on how to best regulate crypto. The group “will focus on key policy issues in relation to the UK crypto and digital assets sector and […] wants to hear from crypto operators, regulators, industry experts and the government on the need to regulate the sector.

On the same day, it was reported that US Senator Elizabeth Warren of Massachusetts was garnering support from her colleagues on Capitol Hill for a letter asking the Office of the Comptroller of the Currency to remove crypto tips on which the banks relied.

The legal advice targeted by Warren allows banks to hold deposits that act as reserves backing stablecoins. This lays the groundwork for banks to potentially offer other crypto-related services. Warren is a hardliner when it comes to crypto regulation, and his letter is said to be asking the OCC to work with the Federal Reserve and Federal Deposit Insurance Corporation to develop a new approach.

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