Crypto Market Plummets: Analyzing BTC and ETH Losses amid Dollar Surge and NFT Downtrend

Dark stormy scene, Bitcoin and Ethereum symbols surrounded by descending arrows, a bold dollar sign rising in the background, dramatic chiaroscuro lighting, turbulent ocean of NFTs, somber mood, abstract brushstrokes, crypto coins caught in the turmoil.

Despite a slight surge in the middle of the week due to the U.S. Department of Labor recording lower-than-expected inflation, Bitcoin (BTC) and Ethereum (ETH) experienced moderate losses as the weekend approached. BTC declined by 7.9%, trading at $26,817, while ETH suffered a 5.8% decrease, with its value settling at $1,800. The announcement that the Principality of Liechtenstein plans to accept BTC as payment for state services failed to prevent a larger loss compared to ETH.

Bitcoin struggled with the rising value of the dollar, which typically has an inverse relationship with the cryptocurrency. This resulted in a pullback following the dollar’s steady increase over two days. Furthermore, the usage of Bitcoin for Ordinals NFTs seems to be slowing, with the trading volume dropping by 50% on May 11 and remaining below its average range for most of the month, according to the Dune dashboard of blockchain analyst Domo. On Tuesday, Bitcoin transaction fees reached a brief two-year high of $31.14, but the metric is now below $10.

Aside from Ethereum, other cryptocurrencies experienced declines greater than 8%. Polygon (MATIC) fell by 11.5% to $0.856058, Avalanche (AVAX) dropped by 11% to $15.01, Toncoin (TON) sank by 11.8% to $1.85, and Internet Computer (ICP) dipped by 9.2% to trade at $5.16.

In other news, American crypto exchange Bittrex filed for Chapter 11 bankruptcy on Monday. The development comes after the Securities and Exchange Commission (SEC) accused the company of failing to register as a broker-dealer, an exchange, and a clearing agency, and allegedly amassed $1.3 billion in illicit proceeds between 2017 and 2022. In March, Bittrex had announced its intention to wind down U.S. operations. CEO Richie Lai cited the current U.S. regulatory and economic environment as the reason for the decision.

Lawmakers in Washington struggled to find a consensus on digital asset regulation, with their main challenge being whether to classify a token as a security or a commodity. This decision would determine whether regulatory jurisdiction would be granted to the SEC or the Commodity Futures Trading Commission (CFTC). Meanwhile, Texas lawmakers voted in favor of updating the state’s Bill of Rights to include the right to own, hold, and use digital currencies. This revision still requires approval from one more vote in the House, one in the Senate, and a public vote.

Lastly, on Thursday, the U.S. Chamber of Commerce criticized the SEC’s regulation-by-enforcement approach toward the digital asset industry. The organization filed an amicus brief endorsing Coinbase in the exchange’s ongoing petition for the securities regulator to clarify its rules. The Chamber claimed that the SEC “has deliberately muddied the waters,” resulting in a chaotic regulatory environment that it contends is by design.

Source: Decrypt

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