On Tuesday, the prices of cryptocurrencies rebounded, with bitcoin taking the lead, after a significant sell-off that was triggered by the U.S. Securities and Exchange Commission’s lawsuit against Binance, despite another lawsuit against Binance’s rival, oinbase">Coinbase. Bitcoin, the largest cryptocurrency by market capitalization, experienced an increase of almost 6% in the past 24 hours, surpassing $27,000. The previous day, bitcoin’s value had dropped to nearly $25,400 as investors, who were already apprehensive due to various digital asset mishaps, abandoned cryptocurrencies following the SEC’s announcement that Binance had violated securities regulations
The wider cryptocurrency market has also made gains since Monday, though not as much as BTC, with ETH, the second largest cryptocurrency by market value, trading just below $1,900, up 4.5% from the previous day. Meanwhile, ADA and SOL, the tokens of smart contract platforms Cardano and Solana, have experienced a slight increase of over 1% after plummeting more than 8% and 10%, respectively. Binance’s BNB token has also seen gains, while Polygon’s MATIC has decreased by 1%. The SEC has identified these tokens, along with nine others, as unregistered securities in the two lawsuits.
Bitcoin is experiencing advantages.
It is worth noting that the SEC did not mention BTC and ETH in its legal actions against Binance and oinbase">Coinbase, which is a reassuring indication for investors that U.S. regulators view both tokens as commodities.
In a market report released on Tuesday, Vetle Lunde, the senior analyst at K33 Research, opined that the initial sharp decline in BTC’s value following the Binance lawsuit was an overreaction. Lunde stated that BTC is classified as a commodity and can be purchased by Americans through a variety of exchanges, exchange-traded funds, payment applications, and other means. Although liquidity could potentially consolidate further towards oinbase">Coinbase and Kraken, Lunde argued that the market should not experience a 5% crash due to these developments.
Senior market analyst Edward Moya at trading platform Oanda suggested in another market report that the SEC’s crackdown on altcoins could potentially benefit Bitcoin. Moya wrote that BTC is becoming an appealing trade option as many crypto investors may choose to abandon most altcoins and stick with what has worked best since the inception of cryptocurrencies. With the SEC identifying Solana, Polygon, Cardano, and BNB as securities, some traders may opt to abandon their positions on major exchanges, switch to a cold wallet, or close their position and open a Bitcoin one instead. Moya’s analysis indicates that BTC could potentially gain market share as investors shift their focus away from altcoins.
