Bitcoin and Ethereum Plunge as Chainlink, XRP, XLM Lead Growth

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Illustration by Mitchell Preffer for Decrypt.

Last week, the meteoric rally in altcoins waned this week as Chainlink, XRP, XLM, Stellar, and TRX were the only coins to post notable gains over the past seven days.

Bitcoin (BTC) and Ethereum (ETH) entered the weekend slightly lower than they did at this time last week.

Bitcoin fell 1.5% to its current price of $29,869, according to CoinGecko. Meanwhile, the world’s second favorite coin, ETH, fell 2.5% to trade at $1,888 at the time of writing.

The biggest declines among major currencies this week were Solana (SOL), which fell 9.8% to $25.68, and Avalanche (AVAX), which lost 8.1% to $13.77.

Several popular altcoins; notably, Toncoin (TON) rose 8.3% to $1.46, Stellar (XLM) exploded 23% to $0.163126, and Chainlink (LINK) rose 15% to $7.98.

Chainlink began its rally on Monday with the launch of its Cross-Chain Interoperability Protocol (CCIP) on its mainnet. The protocol currently supports Avalanche, Ethereum, Optimism, and Polygon networks. It is also integrated with DeFi lending protocols Aave and Synthetix. Chainlink says it is like an on-ramp for TradFi institutions to access tokenized digital assets.

News of the week

On Monday, the G20 watchdog, the Financial Stability Board, released nine high-level recommendations for regulators on oversight of crypto companies and markets. It has also released revised recommendations on monitoring stablecoins.

The recommendations are designed to prevent FTX-wide crypto crashes and Terra incorporate FSB public consultation comments on the subject, including calls for cross-border cooperation among regulators, governance requirements for crypto issuers, and mandatory industry disclosures.

The following day, the United States Securities and Exchange Commission accepted the Valkyries Bitcoin Spot ETF proposal for official review. This is the second spot ETF application to advance to the next round, following asset manager BlackRocks’ titan on July 13.

Exchange operator Nasdaq said on Wednesday it was delaying plans to launch a digital asset custodian service. Nasdaq CEO Adena Friedman said, “Given the evolving business and regulatory environment in the United States, we have made the decision to discontinue the launch of our U.S. digital asset custodian business and related efforts to obtain a relevant license.

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She added that the company will remain committed to supporting the evolution of the digital asset ecosystem.

That day, a bipartisan group of senators introduced a bill that would require decentralized financial services (DeFi) to follow the same compliance rules as financial firms like banks and centralized crypto exchanges, in an effort to reign in criminals, drug traffickers and hostile state actors such as North Korea.

On Thursday, the UK Treasury rejected a recommendation from the House of Commons Treasury Committee to classify crypto trading as gambling, saying it “strongly disagrees” with it.

Finally, on Friday, Republican lawmakers in Washington introduced a 212-page bill titled Financial Innovation and Technology for the 21st Century Act. The bill aims to provide clarity and a much-needed regulatory framework.

The law includes a path for blockchains to be certified as decentralized. The SEC would have an opportunity to push back against claims by token issuers that their projects meet the standard outlined in the law. It also aims to establish a disclosure regime for transparency and compliance for issuers of digital assets.

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