This Week in Coins: Ethereum Outpaces Bitcoin as Markets Thaw

This week in coins. Illustration by Mitchell Preffer for Decrypt

Companies are doing whatever possible to stay solvent during crypto winter—freezing redemptions, laying off employees, cutting spending, filing for bankruptcy, negotiating buyouts—but those conditions couldn’t prevent markets from warming over the last week.

Bitcoin grew 8% over the last seven days to $22,337, as of this writing, but the world’s favorite cryptocurrency was vastly outperformed by Ethereum, which blew up 27% to $1,523.

Anticipation for Ethereum’s upcoming network upgrade—the so-called merge—appears to have driven its growth, although Ethereum Classic (a fork of Ethereum based on the original ledger, which includes records of an infamous $55 million DAO hack that was wiped from Ethereum by vote), surged 80% this week to $27. Clearly, while some buyers are looking to the future, others are feeling nostalgic.

Other blockchains with high functionality smart contracts did well: Solana grew 9% to $40.04, Cardano rallied 10% to $0.47, Polkadot rose 9% to $7.25, NEAR Protocol ballooned by 25% to $4.26, and Avalanche rallied 23% to $23.57.

Other notable rallies for the week included Chainlink, up 9% to $6.78, Cronos up 9% to $0.12, and Bitcoin Cash up 15% to $121.07.

No leading coins suffered significant weekly losses.

75%

Even as markets warmed, signs remained that crypto winter is far from over. Last week, Celsius joined fellow lender Voyager and crypto hedge fund Three Arrows Capital in filing for bankruptcy after weeks of insolvency rumors. This week, Singaporean exchange Zipmex became the latest to halt withdrawals—after Vauld and Celsius.

In similar news, Legion Strategies, a hedge fund affiliated with Anthony Scaramucci’s Skybridge Capital, halted investor redemptions. Legion Strategies owns stock in Sam Bankman-Fried’s FTX. About 10% of the fund’s $230 million worth of assets held under management are cryptocurrencies.

Blockchain.com joined the ranks of Gemini, Coinbase, and OpenSea by announcing mass layoffs that include shuttering its Argentina operation, effectively halting expansion plans. Coinbase also announced it’s “temporarily shutting down” the company’s U.S. affiliate marketing program to lower costs.

News broke on Wednesday that electric car manufacturer Tesla had sold 75% of its Bitcoin, worth approximately $936 million. Back in February 2021, the company invested $1.5 billion in Bitcoin.

Elon Musk may be less bullish on Bitcoin, but he later noted that Tesla still holds all of its Dogecoin, which, on the week, was up about 6%.

The European Central Bank this week announced that interest rates would increase by as much as 0.5% as the bloc attempts to stem raging inflation that reached 8.6% in June. It also spells the end of the -0.5% negative interest rate offered by the ECB since 2014. The prices of leading cryptocurrencies all took a small hit on the news.

Finally, both Paraguay and Colombia inched closer to crypto regulation, with Paraguay’s legislature approving a bill to create a tax and regulatory environment for crypto miners, while Colombia released draft regulations seeking public comment.