Crypto Tokens Bounce Back Despite Regulatory Setbacks
A recent trend in the cryptocurrency market shows that tokens that faced legal actions from the U.S. Securities and Exchange Commission (SEC) are experiencing a resurgence as their trading volumes increase. Financial analyst Kyle Doane discussed this notable development in an interview with Bloomberg. Despite a 20% collective market value loss after being deemed unregistered securities by the SEC, approximately 19 tokens are now contributing to 13% of the total trading volume.
Main Breakdowns:
- Delisted tokens continue to be actively traded on other exchanges
- Traders are attracted to the volatility of these tokens compared to Bitcoin
- SEC-labeled tokens are seen as indicators of regulatory clarity
- Some tokens have already rebounded in value
- International exchanges contribute significantly to the ongoing trading activity of these tokens
Despite being delisted from platforms like Bakkt, Robinhood Markets, and Bitstamp, these tokens are still traded on other exchanges, sparking renewed interest. Traders are drawn to the price volatility offered by these tokens, which is higher compared to the relatively stable Bitcoin market. Additionally, these tokens are seen as indicators of regulatory clarity within the cryptocurrency industry, especially after the recent court ruling on Ripple Labs’s XRP classification.
Some tokens have already started to rebound in value. For example, SOL, the native token of the Solana blockchain, has regained 11% of its value after an initial drop of 35%. However, other tokens like ADA, the native token of the Cardano blockchain, are still down approximately 20% since June 4.
Interestingly, the appeal of these tokens extends beyond the United States. While U.S. exchanges account for only 10% of total crypto trading volume, international giants like Binance and Coinbase have chosen not to delist these tokens, contributing significantly to their ongoing trading activity.
Hot Take:
Despite facing legal battles and market value losses, tokens that have been labeled as unregistered securities by the SEC are finding new life in the cryptocurrency market. Traders are attracted to their volatility and see them as indicators of regulatory clarity. As international exchanges continue to offer these tokens, their trading volumes remain strong. This trend highlights the resilience and adaptability of the cryptocurrency industry.
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