Bitcoin (BTC) has experienced a strong 5.8% increase, positioning itself as the leader in the crypto market recovery following Monday’s steep sell-off. This uptick in price could be attributed to investors looking to move away from altcoins, as the SEC recently deemed various tokens unregistered securities, leading to lawsuits against companies like Binance and Coinbase.
The recovery occurred despite a second lawsuit targeting Binance’s rival, Coinbase. Prices for the leading cryptocurrency soared above $27,000 in a significant rally, especially considering Monday’s plummet to near $25,400. This decline was driven by fearful investors who began abandoning the crypto market after the SEC announced Binance’s securities law violations.
While Bitcoin seems to be the primary choice for those seeking refuge, other cryptocurrencies have experienced a recovery too, albeit not as pronounced as BTC. Ethereum (ETH), the second-largest cryptocurrency, recently reached just below $1,900—a 4.5% increase from its low on Monday. Moreover, the tokens of smart contract platforms Cardano (ADA) and Solana (SOL) witnessed more than 1% growth after steep dives of over 8% and 10%, respectively. Even Binance’s native token BNB experienced positive gains, contrasting with Polygon’s MATIC, which decreased by 1%.
In their lawsuits, the SEC identified twelve tokens, including those mentioned above, as unregistered securities. However, it is worth noting that the SEC refrained from including BTC and ETH in their filings—a critical detail for investors, as it reinforces the perception that U.S. regulators view these leading cryptocurrencies as commodities.
Short-term panic in the market appears to have culminated in BTC’s drop, as highlighted in a market report by Vetle Lunde, a senior analyst at crypto research firm K33 Research. Lunde suggests that concerns regarding liquidity consolidating around companies like Coinbase and Kraken are overstated, as Americans still have access to BTC through a multitude of other exchanges, ETFs, and payment apps. Further to that, he believes the market should not experience a drastic 5% crash due to these ongoing developments.
Conversely, Edward Moya, a senior market analyst at Oanda, proposed the notion that the SEC crackdown on altcoins even supports BTC as a viable alternative for investors potentially seeking to abandon altcoins. Referencing the agency’s securities classification for coins like Solana, Polygon, Cardano, and BNB, Moya suggests that some traders might opt to exit these positions through major exchanges, cold wallets, or by reopening a BTC-based position. As a result, Bitcoin may emerge as the primary beneficiary of these recent regulatory developments.
Source: Coindesk
