Why Crypto Altcoins Moved Big This Week

What happened

There weren’t many positive moves in the crypto industry this past week. The US Securities and Exchange Commission (SEC) has gone all out on crypto, fined the exchange Kraken with 30 million dollars and closed the betting program in the US. Some of the biggest impacts were felt by smaller tokens and businesses that may not have the resources to fight the SEC.

According to data from S&P Global Market Intelligence, the value of Radix (XRD -0.04%) fell 25.3% in the last week and Phantom (FTM -4.79%) has fallen 28.8%, but NEO (NEO -5.11%) was up as much as 11.2% and is now up 1.6% on the week. There may be a good reason for these different reactions.

So what

I’ll start with the SEC’s move, which isn’t entirely clear at the moment. What we do know is that the SEC has shut down Kraken’s Ethereum (ETH -1.31%) strike programme, and it could go after others. Reports indicate that the SEC is trying to prevent traditional financial institutions, such as banks, from even interacting with crypto exchanges, which could isolate the industry.

Radix is ​​built to be a finance-based blockchain with stablecoins, lending, options and even insurance. It’s not clear what the SEC’s impact will be, but if they crack down on efforts, it’s possible these products are next.

Fantom is another blockchain built to offer returns and decentralized finance products that the SEC may resent.

The interesting one is Neo, which has a token for utility and a token for gas, or paying for transactions on the blockchain. This can give the cryptocurrency more ways around the current stake, which will not affect all tokens.

What we do know for sure is that the US is taking a much tougher stance on crypto than ever before.

What now

I wouldn’t read too much into these crypto moves this week. Almost everything is down because of the uncertainty the SEC has brought to the market. But this is a global market, and there has already been pushback from the SEC and the halls of Congress.

Ironically, the SEC’s actions against a major crypto exchange that has been doing well in this volatile market is effectively seen as a big deal for crypto in general. The blockchain was built to be free from government interference and control.

It is not clear how this will end, but one possibility is faster crypto legislation. Bills have already been proposed in Congress that would define what a security is and how crypto companies and exchanges must act, allowing the industry to emerge from the shadows of a legal gray area. It may be forced on the market now.

This will be something to watch closely, but one week does not make the case for or against cryptocurrencies. Especially with these altcoins, technology improvements and user and developer adoption are key. These did not change this week, but more people are needed on the blockchain if the value is to move higher in the long term.