The crypto market saw a turbulent week after Coinbase, an American crypto exchange, recorded a $430 million quarterly net loss and South Korea announced plans to implement a 20% tax on crypto gains. The total crypto market cap faced a 39% drop from $1.81 trillion to $1.10 trillion in just seven days. The market last saw a decrease in valuation in February.
However, last week had a silver lining for the top two cryptocurrencies. Bitcoin bounced 18% from a $24,500 low to the current $30,000 level, and Ether saw a brief rally to $2,100 after dropping to a near-year low at $1,700. This had a trove of institutional investors. Purpose Bitcoin ETF, an exchange-traded instrument listed in Canada, added 6,903 BTC on May 12. It saw the largest single-day buy-in ever registered.
Janet Yellen, the US Treasury Secretary, said the stablecoin market is not a threat to the country’s financial stability. She believes they present the same kind of risks that have been known for centuries in connection with bank runs. The collective market cap of all cryptocurrencies plunged by 19.8% over the past seven days. Currently, it stands at $1.4 trillion. But some mid-capitalization altcoins were wiped out – dropping more than 45% in one week.
Overall, there was a mixed reaction – Maker (MKR) leveraged on the demise of TerraUSD; UST collapsed, and Dai (DAI) remained functional. Fantom (FTM) recorded a one-day 15.3% drop in the total value locked (TVL). Furthermore, altcoins funding rates dropped to worrying levels.