By
Steve Muchoki
May 10th, 2024
The SEC lawsuits last week led to a heavy correction in the altcoins space as the SEC names several altcoins as securities. This, in turn, has helped the Bitcoin dominance to grow.
Over the last few weeks, the world’s largest cryptocurrency Bitcoin (BTC) has been trading under some selling pressure. After the SEC lawsuits on crypto exchanges Coinbase and Binance last week, the BTC price has once again shown downward movement slipping under $26,000. As of press time, BTC is trading at $25,785 with a market cap of $500 billion. However, Bitcoin has gained market dominance as altcoins continue to crash in a greater magnitude than BTC.
The Bitcoin market dominance has reached close to 50% of the entire cryptocurrency market. The crash in the altcoin space comes as the US SEC names a total of 67 tokens as securities. Among the top ten altcoins that suffered the most correction are Binance’s BNB, Polygon’s MATIC, Cardano’s ADA, and Solana SOL.
In such a situation, the rising Bitcoin dominance shows that it is performing better than other altcoins. This clearly shows that Bitcoin works as a safe haven asset in comparison to other altcoins within the crypto sphere.
Recently, as altcoins experienced a significant decline while Bitcoin remained relatively stable, Bitcoin’s market share has approached 50%, reaching a new high since April 2021. Throughout the bear market period from 2018 to 2022, the market share of Bitcoin remained above 50% for an extended duration and even reached as high as 69%, reports Colin Wu.
Also, Bitcoin’s dominance rate has been rising steadily since November 2022 and surged even further during the banking crisis earlier this year.
Crypto Market Shaky, the SEC Strengthens Its Grip
The broader cryptocurrency market looks shaky as of now after SEC’s strong regulatory action last week. Investors have been pulling out funds from the market resulting in thin trading volumes. Richard Galvin, co-founder at Sydney-based hedge fund DACM, said:
“There was some bounceback after the overselling on the weekend but markets are extremely fragile. Crypto specific factors are playing the main role given the recent SEC actions. It seems like there is a resistance on the downside at $1 trillion market cap.”
Investors are feeling worried because there is confusion about how crypto tokens are regulated. In the United States, Bitcoin is considered a commodity, but SEC Chair Gary Gensler believes that most other tokens should be subject to laws protecting investors.
He also thinks that trading platforms should register with the SEC. This uncertainty, along with the recent actions taken by the SEC against Binance and Coinbase, has affected investor sentiment. As a result, Robinhood Markets Inc decided to remove certain altcoins from its platform, which further contributed to the concerns.
The total assets under SEC’s control have also jumped as the federal securities regulator brought several enforcement over the last year.