Altcoin market drops with BNB hitting a 6-month low, as ADA, MATIC, and SOL lead the decline.

Takeaways:

  • The Binance BNB token caused a drop in the altcoin market, while BTC remained stable.
  • The global signal of further rate hikes by central banks caused losses in the cryptocurrency markets.

The U.S. Securities and Exchange Commission (SEC) has targeted major cryptocurrencies as unregistered securities in lawsuits against Binance, causing a sharp drop in altcoins and a move towards the relative safety of bitcoin (BTC).

According to CoinDesk data, BNB, the native token of the Binance Smart Chain, dropped 8% in the last 24 hours to $252, its lowest price since early January. Other top 10 tokens by market capitalization, such as ADA, MATIC, and SOL, also saw a drop of between 6% and 8%.

BTC, the largest cryptocurrency by market cap, was only down 0.9% over the same period and was trading at around $26,500. BTC has been trading between $25,000 and $27,000 for most of the past week.

Ether (ETH) was trading at $1,850, down 1.3% for the day, roughly in line with digital asset markets. The CoinDesk Market Index (CMI), which tracks the price action of a basket of cryptocurrencies, fell 1.1%.

Unregistered securities

The SEC’s inclusion of 13 altcoins in its filings on Monday and Tuesday caused a drop in the prices of those tokens, which could potentially restrict U.S. investors’ trading offerings.

According to Edward Moya, a senior market analyst at broker platform Oanda, “Altcoins are under pressure as the SEC has made it clear they will make it nearly impossible for key exchanges to offer them.”

Enigma Securities, an institutional-focused digital asset brokerage, said in a market report that these tokens may continue their losing streak, particularly if the SEC looks to restrict staking.

More tightening

Surging bond yields globally also caused losses in digital asset markets, as central banks signal further liquidity tightening, according to Oanda’s Moya.

The Bank of Canada hiked interest rates by 25 basis points on Wednesday after a four-month pause and doubled down on continuing its quantitative tightening campaign, while Australia’s central bank (RBA) raised rates to an 11-year high on Tuesday and projected further hikes.

The U.S. 10-year government bonds rose 11 basis points throughout the day, indicating that investors expect the Federal Reserve to keep interest rates higher for longer.

“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.

Edited by James Rubin.

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