The cryptocurrency market is expectantly in a downtrend. The flagship cryptocurrency, Bitcoin, has shifted from the $26K price point and currently trading at the $25K level. Meanwhile, the greater altcoin market is following suit to Bitcoin prices.
At the top 100 altcoins global dashboard, Polygon, Dash, and EOS became the tokens to suffer the heaviest losses. The average price decline noticed among these currencies was reported between 24-25 percent.
On the other hand, some other altcoins such as ADA and SOL have tumbled by 23% and 20% respectively. The current situation is a reaction to the massive lawsuits that SEC has launched at once against Coinbase and Binance.US. The timing of these lawsuits is indicative of a coup in the cryptocurrency sector in the USA.
These lawsuits have also named some of the biggest cryptocurrency projects namely Sandbox, Dash, Solana, Cardano, and Polygon. However, Bitcoin and Ethereum remained relatively unaffected by these changes maintaining a dignified 3% and 5% decline only.
Stablecoins Remain Stable
Santiment is a crypto analytics firm that has recently shared a detailed market survey concerning net outflows and inflows. The impression concerning the future direction of the crypto markets is divided and a trending topic of discussion.
Some stakeholders believe that cryptocurrencies are going to stay active in the form of DeFi regardless of regulatory influences. Santiment report confirms that crypto whales are still in possession of massive digital asset reserves.
However, the firm has noted that rather than fiat conversion whales are opting to convert their crypto holdings into stablecoins.
Santiment report concluded that while the market cap for top stablecoin projects such as USDT, USDC, and Dai experienced a temporary downtrend. However, whales have continued to rack in more stablecoin conversions indicating a willingness to reenter new crypto positions.
However, crypto investors are not alone in their endorsement of stablecoin. Former SEC chairperson recently touted the merits of ‘true stablecoins’ as well.
The former SEC chairperson, Jay Clayton spoke with Bloomberg on June 8th, 2023. He seconded the position of the current SEC chairperson concerning the crypto market. He maintained that regulators were having blunt conversations about crypto and maintained that the sector requires a nuanced approach.
At the same time, he claimed that the presence of blockchain applications in the financial infrastructure of the country should not be controversial. At the same time, he talked about the importance of true stablecoins that are backed by fiat currencies.
He was accompanied by Dan Morehead from Pantera Capital who commented on the mettle of USDC stablecoin during SVB collapse. Clayton also backed the issuance of blockchain-based sovereign debt.
On the other hand, the Financial Services Committee of the United States House recently presented the third draft of the stablecoin bill under the supervision of Rep. Patrick McHenry.
The bill will be discussed on 13th June and deals with the eligibility of stablecoin issuers and define mandatory requirements for stablecoin payments. The bill explains that every state may undertake a personalized regulatory approach towards stablecoins.
However, most states recognize stablecoin issuers as money transmission services and require them to apply for a license subjected to regular audits and miscellaneous regulatory compliances. The bill also maintained that stablecoin entities and services can be subject to the legal purview of various regulatory agencies depending on the contents of stablecoin reserves and their circumference of services.