Relative calm for cryptos during high uncertainty after the SEC advance
By Álvaro Estevez / Alejandra Zamora
Date: Friday 09 Jun 2023
(Sharecast News) - The cryptocurrency market is back on track. Bitcoin (BTC) rises 0.12% in the last 24 hours and consolidates at $26,400, the range in which it has been moving in recent weeks. For its part, Ethereum (ETH) falls 0.3% to $1,830. Both cryptos accumulate a negative weekly balance of more than 2%.
Craig Erlam, senior market analyst at OANDA, pointed out that it´s been a tough week for the crypto space following the two lawsuits filed against Binance and Coinbase by the Securities and Exchange Commission (SEC). Although investors expected this outcome, the regulator's action "is causing significant uncertainty about what this means for exchanges and the coins traded on them." "Of course, this was always likely at some stage with the two sides having not seen eye to eye in the past and this could ultimately lead to a clearer regulatory regime and less hostile environment in the future. But at what cost?" Erlam asked.
"Bitcoin has held up surprisingly well, with crypto traders seemingly seeking out more established cryptos that appear relatively shielded from the SEC action in times of such uncertainty, rather than abandoning the space altogether. If the situation intensifies, that may change, but for now, Bitcoin appears to be reaping the benefits of being cryptos safe haven," the expert highlighted.
The truth is that cryptocurrencies´ prices have held up much better than in other periods of stress, such as those following the collapse of Terra or the bankruptcy of FTX. According to Andrew Lawrence, CEO of the custody platform Census, this underlines the global character of cryptos, especially in the wake of the facilities given by Hong Kong for retail trading and the favorable regulations passed in the European Union and in the United Arab Emirates.
"Longer term, this industry is poised to continue its exponential growth. I just worry that the bulk of this growth will occur outside of the United States - that is, if there are no developments in terms of the positive proposed legislation that is currently working its way through Congress.," the expert indicated in an interview granted to the media outlet 'CoinDesk'.
While cryptos are holding up better than expected, the same cannot be said for crypto exchanges. Coinbase, for example, has been the subject of a gloomy report from S&P, which warns of the negative outlook ahead for the company if the courts uphold the SEC. Mark Palmer, an analyst at Berenberg, also warned that between one-third and two-thirds of Coinbase's revenues are at risk and that the pivot the company must execute to bring its business in line with the regulator's requirements may not be possible.
Binance.US, Binance's U.S. subsidiary, announced that it is suspending all U.S. dollar deposits as of Friday and will suspend all withdrawals as of June 13 in response to the SEC's complaint, as it has been investigating the company since 2020.
"Our priority is, and has always been, our customers. We are taking these proactive steps as we-for a time-transition to a crypto-only exchange. To be clear, we maintain 1:1 reserves for all customer assets. Any downtime in processing withdrawals may be the result of elevated volumes and weekend bank closures. Moreover, trading, staking, deposits and withdrawals in crypto remain fully operational," the company stated in a tweet.
In other market news, cryptos are mixed. Highlights include sharp drops of 4% in Cardano (ADA) and moderate rallies in Ripple (XRP), Solana (SOL) or Polygon (MATIC).
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