BNB Drops to 6-Month Low as ADA, MATIC, SOL Lead Altcoin Tumble
Binance’s BNB token led the sell-off in the altcoin market, while BTC remained flat.
Crypto markets extend losses as central banks globally signal further rate hikes.
Major cryptocurrencies targeted as unregistered securities in U.S. Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase dropped sharply to lead an altcoin sell-off Wednesday as traders sought the relative safety of bitcoin (BTC).
BNB, the Binance Smart Chain’s native token, dropped 8% in the last 24 hours to as low as $252, its lowest price since early January, according to CoinDesk data. Cardano’s ADA, Polygon’s MATIC and Solana’s SOL, all top 10 tokens by market capitalization, also nosedived between 6% and 8% through the day.
BTC, the largest cryptocurrency by market cap, was outperforming, down 0.9% over the same period and changing hands at around $26,500. BTC has been trading between $25,000 and $27,000 for much of the past week.
Ether (ETH) was changing hands at $1,850, down 1.3% through the day, performing roughly in line with broader digital asset markets. The CoinDesk Market Index (CMI), which tracks the price action of a basket of cryptocurrencies, declined 1.1%.
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.
“Altcoins are under pressure as the SEC has made it clear they will make it nearly impossible for key exchanges to offer them,” 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.”
These tokens might extend their losing streak, particularly if the SEC looks to restrict staking, institutional-focused digital asset brokerage Enigma Securities said in a market report.
“ADA in particular would be the major victim, with its growth over the last 4-5 years heavily driven by consumer staking,” Joe Edwards, head of research at Enigma wrote.
Surging bond yields globally also weighed on digital asset markets, as central banks signal further liquidity tightening, Oanda’s Moya noted.
Bank of Canada hiked interest rates by 25 basis points Wednesday again 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, a sign 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.