The NCI closed Sunday 8.7% above last week’s closing. The index’s performance was heavily influenced by Ethereum, up 10.2%, while Bitcoin rose 8.3%.

Crypto markets started the week off relatively stable, interrupting the downward trend started in late June. Bitcoin traded between $19,500 and $20,500, while Ethereum’s price fluctuated between $1,100 and $1,200.

On Wednesday, a less hawkish tone from Fed officials gave both crypto and equity markets steam heading into the weekend.

While the crypto market spent most of the week mirroring equities, headlines still reflected crypto’s internal woes, as funds and lenders affected by the credit contagion filed for bankruptcy and paid off debts.

Prices peaked on Friday, with Bitcoin remaining close to $22,000. Late on Saturday, crypto prices began drifting down toward levels from the first half of the week. Prices continued to descend into Monday, while stock futures began to reflect the uncertainty of the upcoming earnings season and negative COVID-19 news from China. 

While the crypto market spent most of the week mirroring equities, headlines still reflected crypto’s internal woes, as funds and lenders affected by the credit contagion filed for bankruptcy and paid off debts. 

Crypto lender Voyager filed for chapter 11 protection on Tuesday. A press release revealed 58% of the lender’s loan book was composed of loans made to Three Arrows Capital (3AC), a crypto hedge fund at the center of the current credit crunch that filed for bankruptcy earlier this month. 

Celsius, a CeFi lender that froze customer withdrawals earlier in June, made headlines once again after laying off 150 employees and paying off its $223 million debt to DeFi Protocol Maker, according to on-chain data. 

The payment gave the troubled lender access to $450 million in wrapped Bitcoin, a bitcoin token on the Ethereum blockchain used as collateral to obtain the loan; the discrepancy between the amount paid and the collateral is the result of an over collateralized loan, a common practice in DeFi. The wrapped Bitcoin may give the lender the liquidity necessary to pay off other DeFi lenders and free up even more collateral.

The Voyager bankruptcy filing and the Celsius debt payments seem to signal that the crypto market’s credit contagion may finally be slowing.

While Celsius gained access to valuable collateral, Ethereum's blockchain inched one step closer towards its Proof-of-Stake future. Sepolia, another of Ethereum’s public test networks (testnet), transitioned to a Proof-of-Stake consensus mechanism. Seoplia’s successful merge means only one testenet merge remains before the Ethereum mainnet is effectively converted to the Proof-of-Stake model.

Finally, the demand for stablecoins peaked in Argentina on Saturday, as locals sought refuge from their rapidly devaluing currency. The resignation of economy minister Martin Guzmán was interpreted as a sign of further economic deterioration. Argentina’s annual inflation rate surpassed 60% in May. Some exchanges in the South American country reported demand for stablecoins rose by 300% after Guzman’s announcement. In countries where inflation is rampant, crypto is acting as a hedge for some investors—the current cryptos of choice being dollar-backed stablecoins, rather than Bitcoin. 

Curiously, Guzman signed a letter of intent in March promising to “discourage the use of cryptocurrencies” at the behest of the International Monetary Fund (IMF), adhering to stipulations made by the international financial institution as part of a $45 billion bailout deal.

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