While SEC or the Securities Exchange Commission, has begun to characterize cryptos as securities, the whole market seems to have an entirely different idea and is treating these like commodities.
We have reached the second day of what happens to be the enforcement week for SEC, with the organization filling suits against both Coinbase and Binance on consecutive days.
Both these suits have been impacting the exchanges significantly, with the volume of net transfer declining on Binance, and even COIN opened the trading day in the United States with a 20% lower rate as compared to the day before.
In the meantime, both Ether and Bitcoin are up by 4% and 5%, respectively, over the last day. In fact, Bitcoin’s contraction by 5.4% on Monday does not even appear in the top 50 biggest one-day drops since 2021.
Moreover, out of the 13 altcoins that were characterized as securities by the suits, not a single one of them has actually declined over 3%, with multiple of them even trading higher in the day.
Naturally, the market is definitely voting differently in spite of the SEC’s solid assertion that several crypto assets are securities.
Decoupling From Crytpo Organizations?
Ether and Bitcoin have very recently decoupled from conventional financial indexes such as the basic S&P 500. Now, it seems like these are also starting to decouple from the crypto organizations on their own.
Bitcoin and Ehter’s separate road, away from the share price of Coinbase, aligns relatively more with commodities.
Since the SEC actually sued ExxonMobil, crude oil prices will not drop sharply. Now, if SEC does take action against Barrick Gold’s CEO, then Gold’s price would plummet as well.
Gold is gold, and oil is oil – both of these are immutable, both are also ever-present and most importantly, both are hardly affected by regular events. Ether, Bitcoin, and some other assets seem to be operating under an identical rationale.
Similar to the whole physical commodity space, the larger impact on the prices of digital assets has been demand, that is, macroeconomic factors which affect consumption and supply, that is, the decrease in the supply of Ether since the month of September.
Ether and Bitcoin are not really falling sharply post the enforcement actions, specifically against the distribution vehicles, that is, exchanges, which counters the existing narrative about how cryptos operate under the ‘greater fool’ logic which says you can make some money from overvalued assets.
Investors, instead, seem to think that the brightest future of crypto lies ahead.
Currently, crypto markets are saying two things,
- Yep, regulators can definitely take plenty of action against Binance and Coinbase.
- The asset will continue to hold value.
Binance and Coinbase are both separate entities. Ether is Ether, and Bitcoin is Bitcoin until all methods of distribution are eliminated entirely – plus, markets will appear willing just so they can continue to ascribe value to the same.
At the same time, investors will also lie to consider attempts to do the same as the kind of overreach caused several of them to view digital assets as very valuable to start with.
