By Lisa Pauline Mattkal and Medha Singh
(Reuters) – It’s a tough time to be an altcoin. Insecurity reigns.
Lots of altcoins – the catch-all for most cryptocurrencies except bitcoin and ether – have been harmed in lawsuits filed by US regulators against exchanges Binance and Coinbase last week, affecting token prices.
elder. According to CCData, more than 50 cryptocurrencies with a combined value of more than $100 billion and roughly 10% of the total market are now viewed as securities by the SEC watchdog.
Among major players, for example, Solana, Polygon and Cardano have sunk between 23% and 32%.
“The security classification will affect all US crypto exchanges, forcing the closure of various altcoin pairs,” said Vetel Lunde, senior analyst at K33 Research.
Whether US courts will accept the SEC’s classification remains to be seen, but the effects are already being felt – Robinhood Markets has already said it will remove Solana, Cardano and Polygon from its platform. Market participants say other exchanges may follow suit.
This will make it more expensive for individual tokens to operate and list them for crypto exchanges.
“Securities can only be traded by brokers, and only on regulated exchanges, and only with clearing houses and transfer agents and physical certificates,” Ryan Rasmussen, analyst at Bitwise Asset Management, told Reuters Global Markets Forum. “It would definitely be a hindrance to implementing the exchanges.”
Market players say the SEC’s classification is likely to affect investment interest for blockchain underlying tokens such as Solana and Cardano, both notable chains for the development of decentralized finance and other applications.
“This could fundamentally hinder their ability to access funds from the US,” said Lucas Keely, chief investment officer at digital investment platform Yield App. “This will impact the onboarding of developers and users.”
The Cardano Foundation and Solana Foundation told Reuters they disagree with the SEC’s classification of their token as a security under US law, but look forward to working with regulators to gain more clarity. Polygon Labs declined to comment.
calm on the bitcoin front
Crypto’s big guns were surprisingly flexible.
Bitcoin and ether were not named in the SEC lawsuit, nor were stable coins such as Tether and USC Coin.
Bitcoin and ether are still down about 4.5% and 8% since the first SEC lawsuit was filed a week ago, however, indicating that investors are still concerned about crypto.
Alex Thorne, Head of Firmwide Research at Galaxy Digital, said, “The SEC has not stated that BTC, ETH, or stablecoins in general are unregistered securities, and that those assets account for at least 75% of crypto’s total market cap.” Is.”
Many investors also turn to bitcoin in times of uncertainty, considering it a relatively safe haven among crypto assets, and this time is no different. According to data tracker CoinMarketCap.com, bitcoin’s cryptocurrency market share rose to 47.6% from 45% before the lawsuit.
Crypto-focused economist Noel Acheson said the market data was indicating long-term bitcoin holders are sitting tight.
According to analytics firm Glassnode, among bitcoin traders, those who held the coin for less than five months were the most active in trading last week, accounting for 76.4% of deposits. In contrast, bitcoin investors who held their coins for more than five months appeared relatively calm, with only 1.9% of deposits held.
It may not be all doom and gloom for beleaguered altcoins, say market watchers who say their price drop could attract investors.
Unlike bitcoin and ether, investment products tracking altcoins have seen positive – though smaller – net inflows, CoinShares data showed on Monday.
CoinShares analyst James Butterfield said, “Altcoins … represent assets that are at a much earlier stage of development than bitcoin, with investors willing to give them the benefit of the doubt, holding onto their investments, hoping that they will be successful.”
(Reporting by Lisa Matakkal and Medha Singh in Bengaluru; Editing by Praveen Char)
Source: www.bing.com
