(Bloomberg) -- Crypto diehards can’t seem to catch a break, with the rapidly shrinking digital-asset world being pummeled for another week by eroding token prices, fresh regulatory actions and a case of contagion deja vu.

One-month crypto-equities correlations show Bitcoin is back to mirroring stocks once again for directional moves, and trading volumes “are struggling to sustain higher levels” while lingering below last year’s averages, according to Citigroup strategists led by Alex Saunders. Meanwhile, Bitcoin’s share of the total crypto market has grown to the highest in about 20 months, meaning that more investors are flocking to it amid uncertainty at the expense of other tokens. 

The onslaught comes after what some observers have termed as one of the most consequential weeks ever in the little-more-than decade-old sector. In addition to suing Binance and Coinbase for operating illegal exchanges, the US Securities and Exchange Commission sent a chill through markets last week by deeming a raft of smaller tokens to be unregistered securities.  

“The current uncertainty has multiple implications, most notably a plausible act of caution from institutional investors,” wrote K33’s Bendik Schei and Vetle Lunde. “This could limit liquidity further onwards and lead to a prolonged slow market.”    

The combined market value of more than 25,000 cryptocurrencies is around $1 trillion, or about of third of the $3 trillion estimate in late 2021, according to data from CoinMarketCap. That’s about equal to the value of Nvidia Corp., which has almost tripled in value this year as investors — including many former crypto enthusiasts — are won over by the optimism around artificial intelligence. 

Here’s a rundown of some of the week’s most eye-catching events:


After being hit with a weekend crash, cryptocurrencies resumed losses Monday as last week’s regulatory actions continued to weigh on sentiment.

Binance.US urged a federal judge to reject an SEC request to freeze billions of dollars of assets on the cryptocurrency exchange, arguing the move would cripple its business and hurt customers.

Israel-based social-trading platform eToro said it won’t allow US customers to open new positions in a number of crypto tokens. The SEC had designated 19 tokens as being securities. EToro followed a similar move by Robinhood Markets last Friday.


Investors did appear to catch a reprieve when Binance.US and the SEC agreed to work on a deal that avoids a total asset freeze at the trading platform.

Still, data showed that activity in products linked to the industry have been nearly nonexistent. Almost $172 million exited from global exchange-traded products tracking everything from Bitcoin to Cardano in the first six months of 2023, following outflows of just $37 million in 2022. That compares to record cash inflows of nearly $10 billion in 2021 and $6.7 billion in 2020, Bloomberg data show.


Crypto prices resumed their slump after the Federal Reserve signaled the possibility of resuming its interest-rate hikes after pausing its tightening cycle. Alt-coins were hit especially hard. 

“It feels like we’re entering the end game,” wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. “This is a period in any cycle just before trends turn, and is usually characterized by chaos and conflict.”

Elsewhere, Miami mayor and crypto proponent Francis Suarez said he was running for president in what’s likely a very long-shot bid. He had once dubbed his city the “crypto capital of the world.” MiamiCoin is down roughly 99% from its 2021 highs, according to CoinGecko. 


Two crypto lenders with links to South Korea halted withdrawals in quick succession, a reminder of lingering risks even after regulators around the world tightened oversight of the industry. 

Tether’s USDT, the world’s largest stablecoin, deviated slightly from its peg to the US dollar. That was seen by some as suggesting that investors were offloading the token.

Crypto trading platform Abra was accused of securities fraud by a Texas regulator that filed an emergency cease-and-desist order against the company and its chief executive officer. New Jersey made similar allegations Friday.

One bright spot was BlackRock’s filing of an application for a spot-Bitcoin ETF product, with Coinbase listed as custodian. Regulators have in the past rebuffed such attempts, citing a lack of investor protections, among other things. The price of Bitcoin rose following the announcement. 


Documents released by New York’s Attorney General showed that Tether once counted securities issued by Chinese companies among the reserves backing its USDT stablecoin. 

French officials said Binance is under investigation for the alleged illegal provision of digital-asset services and acts of aggravated money laundering. A Binance spokespersons declined to comment on specifics of law enforcement or regulatory investigations. 

©2023 Bloomberg L.P.