This Week in Coins: Flash Crash! Bitcoin and Ethereum Shed 10% as Altcoins Tumble

Illustration by Mitchell Preffer for Decrypt.

The prices of leading cryptocurrencies took another downturn this week after briefly inching upwards the week before. 

Market leader Bitcoin (BTC) posted a mild overnight drop of 2% to below $29,000 on Thursday, after minutes of the latest Federal Reserve policy meeting were released the day before. The document indicatesthat  the U.S. central bank will continue its conservative monetary policy in an ongoing effort to rein in inflation.

Later that day, Bitcoin dropped below $28,000 for the first time in two months. By the afternoon, it appeared to be in the midst of a flash crash, reaching a bottom of $25,649 before rebounding a little. 

Analysts told Decrypt that market liquidity has been in decline for a while now, leaving the entire market vulnerable to a sudden big sell-off. 

And a huge sell-off is just what occurred. News that Chinese property giant Evergrande filed for Chapter 15 bankruptcy protection in a Manhattan court prompted institutional investors and big holders to dump riskier assets, like stocks and Bitcoin, causing the sudden drop. 

All told, Bitcoin ends the week at $25,935, posting a seven-day drop of 11.9%.

Closest contender Ethereum (ETH) fared similarly, with an intraweek drop of 10.2% to $1,662.

Broadly speaking, these were some of the lightest price movements. Altcoins generally tumbled harder, with most other leading cryptocurrencies posting losses of between 10% and 20%, including BNB, XRP, Dogecoin (DOGE), Solana (SOL), Polkadot (DOT), Polygon (MATIC), and Avalanche (AVAX).

Losses of over 20% were felt by holders of Uniswap (UNI), Litecoin (LTC), and Shiba Inu (SHIB), which dropped over 23%. 

The most resilient cryptocurrency in the top twenty by market cap was TRON (TRX), which only fell 4.8% and currently sells for $0.073810.

In the news…

The regulatory uncertainty around crypto continued apace as the news cycle in the U.S. and beyond gave crypto hopefuls very little to chew on. 

On Monday, the Federal Deposit Insurance Corporation–a leading U.S. bank regulator–dedicated two out of ninety pages to crypto in its annual report. Insignificant as it may seem, this was a first for the FDIC, which used the slim space to point out that crypto may pose “novel and complex” risks to the financial system. 

Argentinian Bitcoin fans enjoyed a different week than the rest of us. The world’s favorite cryptocurrency reached its Argentine all-time-high of 10.2 million Argentine Peso (ARS) on Wednesday, piggybacked by a surprise victory in the country’s presidential primaries by hopeful Javier Milei, a professed libertarian known for his pro-Bitcoin stance.