Bitcoin made a strong recovery in Asian markets early Wednesday, crossing the $27,000 mark. This positive trend is mirrored by most of the top 10 cryptocurrencies, excluding token Matic Polygon, which saw a slight 1.7% decline in the last 24 hours.
Specifically, Bitcoin’s value increased by 5.36% in the last 24 hours, reaching $27,118 at 6:50 am in Hong Kong. This bounce comes despite the recent lawsuits filed by the US Securities and Exchange Commission (SEC) against major crypto exchanges Binance and Coinbase. The lawsuits allege that most of the tokens traded on this platform are unlisted securities. However, Bitcoin’s overall performance still shows a 2.32% decline over the past week, based on CoinMarketCap data.
Ether, the second largest cryptocurrency, witnessed a 4.01% surge in the last 24 hours, reaching $1,881. Nonetheless, it suffered a 1.32% loss during the week.
Interestingly, Dogecoin emerged as the top winner with an increase of 6.43%, overtaking Bitcoin. In contrast, Matic Polygon token missed the rebound, slipping 1.7% in the last 24 hours and suffering a significant loss of 9.39% over the last week.
Nick Ruck, Chief Operating Officer of ContentFi, a non-fungible token (NFT) intellectual property licensing firm, shares insights on the market reaction to SEC lawsuits. Despite the initial panic, Ruck notes that many traders anticipate lawsuits and ignore the repercussions, suggesting that a trial judge will determine the outcome rather than the opinion of Gary Gensler, chairman of the SEC.
While the leading tokens are showing signs of recovery, altcoins are facing a challenging situation. Jeff May, COO of crypto exchange BTSE, expressed concern over SEC lawsuits targeting altcoins, which are classified as securities, while Bitcoin and Ethereum are not. This situation creates opportunities for volatility for experienced investors, but caution is advised when navigating the markets.
SEC legal action is not limited to Binance and Coinbase. The Alabama Securities Commission and regulators from several other states issued a show cause order to Coinbase, demanding an explanation within 28 days for allegedly selling unregistered securities in Alabama.
Coinbase CEO Brian Armstrong said the company welcomes the opportunity to seek clarity on crypto regulations through the legal process. Armstrong highlighted inconsistencies between the SEC and the Commodity Futures Trading Commission regarding the classification of crypto assets as securities or commodities.
Coinbase shares fell 12.09% in US trading on Tuesday but saw a 2.48% increase after hours. Meanwhile, the SEC asked a federal judge to freeze the assets of Binance.US, a crypto trading platform serving US clients.
Denys Peleshok, head of Asia at CPT Markets, voiced concern that the SEC’s aggressive approach to crypto companies could create an inhospitable environment for the industry in the US. Similarly, Republican Senator Cynthia Lummis criticized the SEC’s actions, stressing the importance of building a strong market legal framework for exchanges to comply with instead of pushing the industry underground.
However, not everyone shares this view. Jai Waterman, CEO of Blockstation, argues that many of the cryptocurrencies listed on Binance and Coinbase can be considered securities. He stated that these exchanges take on the dual roles traditionally segregated in the securities market, thereby increasing the associated risks.
Overall, the recent SEC lawsuits against major crypto exchanges have caused fluctuations in the market. However, the resilience of the crypto industry shows that it can ride out the storm, waiting for the outcome to be decided by the courts rather than relying solely on regulatory action.