BTC, ETH and Stablecoins Domination Increasing

Cryptoassets such as Binance’s BNB, Cardano’s ADA and Solana’s SOL, identified as securities under the lawsuits, lost up to 30% of their value over the course of the week. Robinhood and eToro have decided to end trading in the US for some of the tokens marked by the SEC. Investors are fleeing altcoins with pressure from the US regulator; Bitcoin and Ethereum stand out.

The dominance of Bitcoin (BTC), Ethereum (ETH) and stablecoins in the crypto market has reached its highest level since February 2021, as investors shunned smaller tokens, coupled with strict measures by US regulators last week. A report from digital asset research firm K33 Research stated that the two largest digital assets and stablecoins have a combined crypto market cap of around $1 trillion, accounting for 80.5% of the market.

Cryptoassets such as Binance’s BNB, Cardano’s ADA and Solana’s SOL, identified as securities under SEC lawsuits, lost up to 30% of their value over the course of the week. If the SEC’s claim that many tokens are securities turns out to be true, token issuers and exchanges will be required to register with the SEC. Popular retail trading platforms Robinhood and eToro have decided to end trading in the US for some of the SEC-marked tokens, while market makers may have sold the tokens in anticipation of falling trading demand.

K33 stated that the years of this legal struggle will prevent capital inflows to the assets under review by the SEC, and that BTC and ETH will come to the fore as safer investment options against regulatory risks. We may see BTC and ETH dominance further strengthened in the next year due to the cost and risk burden of allocating capital to altcoins over the period of 2017 and beyond.