This Week in Coins: Ethereum Bounces Back, Bitcoin Slides, Russia Bans Crypto Payments

This week in coins. Illustration by Mitchell Preffer for Decrypt

While many cryptocurrencies fell over the last seven days, the preceding weeks still were quite a bit worse.

And although Bitcoin has dipped about 3.5% over the last seven days to $20,831 as of this writing, Ethereum has added 11.1% over the same period, now trading near $1,357.

Notable gains this week included Polygon’s 19.46% surge to $.70, Uniswap’s 11.6% rally to $7.07, and privacy coin Monero’s 10.5% jump to $139.39.

Several leading projects went the other direction: Cardano dropped 8% to $0.44, Dogecoin fell 9.6% to $0.06, and NEAR Protocol slipped 8% to $3.44.

In the news

One of the heaviest blows to crypto prices this week came from an inflation report on Wednesday by the U.S. Bureau of Labor Statistics, which noted that the Consumer Price Index (CPI) rose 9.1% in the 12 months up to June. That’s the largest 12-month increase in over 40 years, with the biggest price leaps seen in food, shelter, and gasoline.

Last month, in response to inflation readings from May, the Federal Reserve raised interest rates by 0.75%, the steepest hike since 1994. The new CPI numbers could prompt the Federal Reserve to raise rates even further to increase the cost of borrowing and curb inflation.

More crypto and stock selloffs followed that news, as investors dumped riskier assets. An hour after the numbers were released, Bitcoin had dropped more than 4% while Ethereum fell by over 6%. (At one point, the report may have pushed Bitcoin’s price down by as much as 6%.)

On Friday, data released by Bloomberg revealed that the Bitcoin-to-Nasdaq correlation is nearing its lowest point this year. This means that despite their respective bear markets, Bitcoin has resisted more downward pressure than stocks. This is an altogether different story compared with April, when Bitcoin’s 30-day correlation with the Nasdaq was the highest level in over a year.

Ethereum’s relative price resilience going into the weekend stems from anticipation of the network’s upcoming transition to proof-of-stake. On Thursday, the network successfully ran one of the last tests before The Merge, which at the time pushed Ethereum up almost 13% in a 24-hour span.

The Merge will transition the entire Ethereum network onto a proof-of-stake version of itself that’s running in parallel to Ethereum’s current proof-of-work mainnet. On Friday, Beacon Chain community manager superphiz.eth shared a tentative timetable of the final updates.

In global politics, the Financial Stability Board (FSB) announced on Monday it will come up with its own proposals to ensure crypto gets “robust regulation and supervision.” The FSB comprises treasury officials and central bankers from Group of 20 (G-20) economies. It will report to G-20 finance ministers and central bank governors in October, outlining regulatory and supervisory approaches to stablecoins and other crypto assets.

And finally, Russian President Vladimir Putin signed into law a national ban on using digital assets for payments, although it’s still possible to buy and hold cryptocurrencies.