The SEC’s impact appears to have just begun as the tokens faced their first-ever “delisting” from a crypto exchange. The impact was extremely high as the prices of Cardano, Polygon, and Solana plunged heavily, dragging the entire crypto space down. Moreover, the altcoins may continue to be slaughtered and maintain a bearish trend ahead. Besides, the dominance of Bitcoin is marking a 2-year high that may differ the Altseason for a long time.
The major reason for the prevailing dump is said to be Robihood delisting Solana, Polygon, and Cardano. These three altcoins are among the tokens with good fundamentals, and hence, distrust over these tokens has caused huge FUD within the markets as market participants assume more tokens to be delisted soon. Additionally, the volume is at a multi-year low, and hence, the selling pressure may be deteriorating.
Therefore, if the cryptos that are listed by the SEC as securities are proven right, then they need to submit their entire data to the US government. In case, the SEC wins, then either of the scenarios may occur,
- Crypto companies may register themselves with the SEC and provide all info. They may also work as a registered company which will be difficult for the existing models of projects.
- Crypto companies may move out of the US which may not allow the US residents to deal with those assets. This may compel the companies to exit the US market inviting a liquidity crisis in trading and funding from VCs.
The second scenario appears to be more likely, as the impacts have already been seen. The market markers are exiting the market, the US exchanges are delisting cryptos, and VCs are not funding new or existing projects.
Presently, the trading volume is at multi-year lows, which may further increase the volatility. Moreover, with that $1.3 billion could be dumped on the open market which is a huge. Besides, the majority of the altcoins have less than $100 million in daily trading volume. Hence, the FUD around the crypto is very high after the SEC vs Binance lawsuit which is currently acting as a fuel to the fire.