Bitcoin made a strong recovery in the Asian market on Wednesday morning, surpassing the $27,000 mark. This positive trend was mirrored by most of the top 10 cryptocurrencies, excluding Polygon’s Matic token, which experienced a slight 1.7% dip in the past 24 hours.
Specifically, Bitcoin’s value increased by 5.36% within the last 24 hours, reaching $27,118 at 6:50 a.m. in Hong Kong. This bounce-back occurred despite the recent lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against major crypto exchanges Binance and Coinbase. The lawsuits alleged that most tokens traded on these platforms are unregistered securities. However, Bitcoin’s overall performance still showed 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 over the week.
Interestingly, Dogecoin emerged as the top gainer with a 6.43% increase, surpassing Bitcoin. In contrast, Polygon’s Matic token missed the rebound, slipping by 1.7% within the last 24 hours and experiencing a significant 9.39% loss over the past week.
Nick Ruck, the Chief Operating Officer of ContentFi, a non-fungible token (NFT) intellectual property licensing firm, shared insights on the market reaction to the SEC lawsuits. Despite the initial panic, Ruck noted that many traders anticipated the lawsuits and disregarded their impact, suggesting that court judges would determine the outcomes rather than the opinion of Gary Gensler, the SEC chair.
While leading tokens displayed signs of recovery, altcoins faced a challenging situation. Jeff Mei, the COO of BTSE crypto exchange, expressed concerns over the SEC lawsuits targeting altcoins, classified as securities, while Bitcoin and Ethereum were not. This situation created volatility opportunities for experienced investors, but caution is advised when navigating the market.
The SEC’s legal actions were 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 welcomed the opportunity to seek clarity on crypto rules through legal processes. Armstrong highlighted the inconsistency between the SEC and the Commodity Futures Trading Commission regarding classifying crypto assets as securities or commodities.
Coinbase’s shares experienced a 12.09% decline in U.S. trading on Tuesday but saw a 2.48% increase after-hours. Meanwhile, the SEC requested a federal judge to freeze the assets of Binance.US, the crypto trading platform serving U.S. clients.
Denys Peleshok, the head of Asia at CPT Markets, voiced concerns that the SEC’s aggressive approach towards crypto companies might create an unwelcoming environment for the industry in the U.S. Similarly, Republican Senator Cynthia Lummis criticized the SEC’s actions, emphasizing the importance of establishing a robust legal framework for exchanges to comply with instead of pushing the industry underground.
However, not everyone shares this view. Jai Waterman, CEO of Blockstation, argued that many cryptocurrencies listed on Binance and Coinbase could be considered securities. He stated that these exchanges take on multiple roles traditionally separated in the securities market, thereby increasing the associated risks.
Overall, the recent SEC lawsuits against major crypto exchanges have caused fluctuations in the market. Still, the resilience of the crypto industry suggests that it may weather the storm, awaiting the outcomes decided by the courts rather than relying solely on regulatory actions.