Cryptocurrency markets saw a major altcoin sell-off Wednesday as traders sought the relative safety of bitcoin (BTC) after the U.S. Securities and Exchange Commission (SEC) targeted major cryptocurrencies in lawsuits against Binance and Coinbase. BNB, ADA, MATIC, and SOL, all top 10 tokens by market capitalization, nosedived between 6% and 8% through the day. BTC, the largest cryptocurrency by market cap, was down 0.9% over the same period.
Altcoins are under pressure as the SEC has made it clear they will make it nearly impossible for key exchanges to offer them, said Edward Moya, senior market analyst at broker platform Oanda. With an SEC tag of being a security, crypto traders are abandoning ship with BNB, ADA, MATIC, and SOL, with some moving those funds towards bitcoin.
The SEC’s inclusion of 13 altcoins in its filings Monday and Tuesday weighed on those token’s prices, potentially restricting U.S. investors’ trading offerings. Surging bond yields globally also weighed on digital asset markets, as central banks signal further liquidity tightening.
Joe Edwards, head of research at Enigma Securities, noted that ADA in particular would be the major victim, with its growth over the last 4-5 years heavily driven by consumer staking.
It appears Wall Street is fearful that the Fed might have to deliver more tightening just like the Bank of Canada and Reserve Bank of Australia have signaled this week, Moya added.