2023-6-9 17:30 |
In a market heavily influenced by Bitcoin (BTC) and Ethereum (ETH), their slight price decline recently has been overshadowed by a more substantial fall in larger altcoins. Notably, Cardano (ADA), BNB (BNB), Polygon (MATIC), and Solana (SOL) have seen a more than 10% drop over the past week.
This downturn traces back to regulatory actions taken by the US Securities and Exchange Commission (SEC) against industry titans Binance and Coinbase.
Regulatory Pressure And The Crypto MarketThis heightened market volatility follows charges laid by the SEC on Tuesday against Coinbase for facilitating the trading of crypto assets they labeled as unregistered securities.
The list of implicated assets includes FLOW, VGX, MATIC, and ADA. A similar charge was filed against Binance, where these assets, among others like BNB, BUSD, SOL, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI, were categorized as securities. It’s interesting to note that the SEC did not include tokens with substantial trading volumes such as ETH, USDC, USDT, LTC, and BTC.
Charles Hoskinson, the founder of Cardano, responded to these charges by suggesting that the regulatory crackdown was a move to pave the way for a Central Bank Digital Currency (CBDC). In his view, the government aims to leverage the CBDC as a tool to assert control over people’s finances, facilitated by a selection of influential banks.
Hoskinson noted:
With respect to Binance, I’m reading through the SEC complaint. It’s over 130 pages, but seems like the next in a series of steps to implement chokepoint 2.0 in the United States. The end goal is a agenda based CBDC partnered with a handful of massive banks and end-to-end control over every aspect of your financial life.
The Market Impact On ADA, BNB, MATIC, And SOLIn the wake of this regulatory scrutiny, ADA’s price has seen a market downtrend, falling by 15% over the past 7 days, with a further 2.8% loss in the past 24 hours alone. At the time of writing, ADA is trading at $0.31, a significant drop from its pre-regulation price.
In spite of the price drop, ADA’s trading volume surged from $228 million to over $400 million between last Friday and yesterday, indicating a high sell pressure. It is worth noting that over the past week, more than $2 billion have been subtracted from the asset’s market capitalization.
Similarly, other altcoins such as Polygon (MATIC), Binance Coin (BNB), and Solana (SOL) have mirrored ADA’s price action. In the past week, MATIC, BNB, and SOL have recorded downward turns of 13.6%, 15.7%, and 11.4% respectively.
Notably, among the global crypto market capitalization, ADA currently ranks 8th with SOL and MATIC ranking below Dogecoin (DOGE). Meanwhile, despite the large impact on BNB, the asset still ranks 3rd in the global crypto market.
This turbulent market activity, however, underscores the substantial influence of regulatory entities on the cryptocurrency market.
Featured image from iStock, Chart from TradingView
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