Crypto markets inched higher on Wednesday, with Bitcoin (BTC) and Dogecoin (DOGE) leading the gains among major tokens. Litecoin (LTC), XRP and Shiba Inu (SHIB) also jumped as much as 4%, while the total crypto market capitalization rose 3.3% to $1.12 trillion. This rebound came despite the regulatory troubles of Binance and Coinbase (COIN), two of the largest crypto exchanges by trading volumes.
The bounce reversed losses for traders reeling from a record liquidation event on Monday, when over $293 million worth of token-tracked futures products were liquidated, said Jeff Mei, COO of crypto exchange BTSE. Liquidation occurs when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss of initial margin.
The reversal also came as traders likely shook off long-term implications of regulatory troubles for influential exchanges in the U.S., with some tokens termed as a security. Alex Adelman, CEO of bitcoin rewards app Lolli, shared that the fact that the SEC did not mention bitcoin anywhere in its filings against Binance and Coinbase also underscores the SEC’s previously stated position that bitcoin is not a security and thereby not under the agency’s purview.
BNB coin (BNB), Solana’s SOL, Cardano’s ADA and Polygon’s MATIC, tokens alleged as securities in multiple filings earlier this week reversed losses as well, but were ultimately trading at a 3% haircut compared to Tuesday.
It’s possible we’ll continue to see this bifurcation of crypto markets, with the blue-chip bitcoin and ether holding ground, but with continued uncertainty for the majority of altcoins, Mei added.
Some say the filings strengthened the value proposition of bitcoin as the largest cryptocurrency, alongside the second largest cryptocurrency ether (ETH), was not explicitly termed as a security by the SEC. Adelman opined that the agency’s enforcement actions against select tokens as unregistered securities may continue to work in bitcoin’s favor, as investors increasingly shift their capital into bitcoin as a fundamentally secure, sound, and independent store of value.