- Bitcoin’s price plummeted to $25.4K after the SEC filed a lawsuit against cryptocurrency exchange giant Binance, unsettling the entire crypto market.
- Amid the market turmoil, Lido’s stETH token has ascended to become the seventh largest by market cap, surpassing Cardano and trailing just behind XRP.
In a dramatic response to the Securities and Exchange Commission’s (SEC) legal action against Binance, Bitcoin’s value nosedived to $25.4K, reflecting a significant market disturbance. The SEC has alleged that Binance, the behemoth crypto exchange, violated securities laws, thereby inciting an industry-wide unease.
Over the past week, Bitcoin, the premier digital asset by market capitalization, was confidently trading above $27,000. The SEC’s action against Binance has however reawakened concerns over regulatory dominance and the integrity of crypto exchanges. This anxiety is understandable, given Binance’s history of regulatory scrutiny. In the wake of this news, the market experienced a notable sell-off.
However, the ripples of this event were anticipated according to Bob Ras, co-founder of Sologenic, a network that employs blockchain to tokenize securities.
It is worth noting that the market reaction following these recent events doesn’t necessarily mirror the significant liquidations observed in 2022 after the collapse of Luna, Celsius, and FTX. Ras predicts a more gradual recovery this time around.
Similarly, Ether, the second largest cryptocurrency, also experienced a downturn, dropping below $1,800. Following the trend set by Bitcoin, most altcoins have seen a decline in value post the SEC lawsuit. In fact, the SEC lawsuit has even tagged certain tokens as unregistered securities, further adding to the market distress.
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As the digital market struggles, traditional assets and broader equity indexes such as the Nasdaq Composite and S&P 500 appear largely undisturbed. Nevertheless, the SEC lawsuit has had notable repercussions on crypto-related stocks. Coinbase’s shares, for instance, fell more than 5% right after the filing was publicized, and the market closure saw a dip of more than 9%.
Simultaneously, amid the market turmoil, Lido’s stETH token is making waves, rising to become the seventh largest token by market cap, inching ahead of Cardano and trailing just behind XRP. The market seems to have embraced staking, seeking solutions resistant to U.S. regulatory uncertainty. Thus, stETH’s rise signifies institutional trust in its underlying staking mechanism.
Despite regulatory challenges and market fluctuations, the sector continues to attract new market participants. As a testimony to the health and resilience of the staking market, Lido now holds 28% of the market share with $13.4 billion in total value locked. While the sector shows promise, uncertainties linger. It remains to be seen how a potential increase in staked Ether’s profitability might affect the market dynamics.
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