June 13 (Reuters) – Tough times for altcoins. Anxiety reigns.
A large number of altcoins, common to most cryptocurrencies except bitcoin and ether, were harpooned last week in a lawsuit filed by US regulators against exchanges Binance and Coinbase (COIN.O), pushing token prices up. dropped.
It’s big. According to CCData, more than 50 cryptocurrencies valued at over $100 billion and accounting for about 10% of the total market are now considered securities by SEC regulators.
Among the major players, Solana, Polygon and Cardano, for example, fell between 23% and 32%.
“The security classification will affect all U.S. crypto exchanges and lead to the forced closure of various altcoin pairs,” said Vetl Runde, senior analyst at K33 Research.
Whether or not US courts will accept the SEC’s classification remains to be seen, but the impact is already being felt, with Robinhood Markets (HOOD.O) already announcing that Solana, Cardano and Polygon will be removed from their platform. . Market participants say other exchanges may follow suit.
This would increase both the operating costs of individual tokens and the cost of listing on cryptocurrency exchanges.
Ryan Rasmussen, an analyst at Bitwise Asset Management, told the Reuters Global Markets Forum that “securities are sold only by brokers, only on regulated exchanges, clearinghouses and transfer agents and physical You can only trade with a valid certificate,” he said. “For exchanges, it will certainly be an implementation hurdle.”
The SEC classification is likely to hurt investment interest in the blockchains underlying tokens like Solana and Cardano, which are high-profile chains that will develop decentralized finance and other applications, market officials said. To tell.
Lucas Keely, chief investment officer at digital investment platform YieldUp, said it could fundamentally hamper the ability to get funding from the US, affecting developer and user onboarding. He added that it was likely.
The Cardano and Solana foundations told Reuters they do not agree with the SEC classifying their tokens as securities under U.S. law, but look forward to working with regulators to provide further clarification. Told. Polygon Labs declined to comment.
The front line of bitcoin is quiet
Krypto’s big arsenal was surprisingly resilient.
Bitcoin and Ether are not named in the SEC lawsuit, nor are stablecoins such as Tether or USC Coin.
However, Bitcoin and Ethereum are down about 4.5% and 8%, respectively, since the first SEC lawsuit was filed a week ago, indicating that investors are still worried about cryptocurrencies. there is
“The SEC has not said that BTC, ETH and stablecoins are generally unregistered securities, and these assets account for at least 75% of the cryptocurrency market capitalization,” said Galaxy Digital’s companywide investigation. Alex Thorn said.
Many investors also see Bitcoin as a relatively safe haven among crypto assets and tend to rely on it during times of high uncertainty, and this time is no exception. According to data tracker CoinMarketCap.com, Bitcoin’s share of the cryptocurrency market has risen from 45% before the lawsuit to 47.6%.
Crypto economist Noel Acheson said market data shows long-term Bitcoin holders are doing well.
Among Bitcoin traders, those who have held bitcoin for less than five months were the most active last week, accounting for 76.4% of deposits, according to analytics firm Glassnode. By contrast, bitcoin investors who have held their coins for five months or longer appeared relatively calm, accounting for just 1.9% of their deposit volume.
And it may not necessarily be hopeless and depressing for altcoins in distress, according to some market watchers. Falling altcoin prices may be attracting value-seeking investors, he said.
Investments tracking altcoins, as opposed to bitcoin and ether, have registered small but positive net inflows this year, data from Coinshares showed Monday.
CoinShares analyst James Butterfield said, “Altcoins … represent an asset that is in a much earlier stage of development compared to Bitcoin, with investors putting their investments on hold and altcoins coming to fruition. I am looking forward to it,” he said.
Reported in Bangalore by Lisa Matakkal and Meda Singh.Editing: Pravin Char
Our criteria: Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News as committed to honesty, independence and freedom from bias based on trust principles.
