What happened
Cryptocurrency valuations jumped again on Thursday, continuing a wild week for the industry. Major cryptocurrencies were up by single digits, but smaller altcoins made big moves on some potentially helpful regulatory comments.
As of 1 p.m. ET today, Helium (HNT -7.56%) was up 6.6% in the past 24 hours, Bitcoin Cash (BCH 8.84%) was up 12.9%, Cosmos Hub (ATOM 6.74%) had jumped 14.8%, and NEAR Protocol (NEAR 4.28%) was up 10.5%.
So what
The biggest news was from Securities and Exchange Commission (SEC) Chairman Gary Gensler, who reiterated that he thinks most tokens are securities. He also thinks “intermediaries” like exchanges and lending protocols need to be registered as broker-dealers with the agency.
His counterpart at the Federal Reserve, Michael Barr, a member of its Board of Governors, said yesterday that he sought regulation for stablecoins, which could also bring some stability to the market given uncertainty for many “stable” tokens.
Helium continues its volatile trading after voting to move to the Solana blockchain. This will simplify the group’s operations and allow it to focus on building its wireless network and not a blockchain, but investors have sent the token for a loop over the last month speculating on the impact. Today, at least, the sentiment is positive.
It’ll be interesting to see if more tokens follow this path. Building a blockchain is difficult and expensive, and an established blockchain like Solana could be a perfect place for more projects to build on. Transactions are fast and cheap, and a growing ecosystem is good for everyone.
Coinbase Global‘s recent listing of NEAR Protocol might be helping its value slightly today. More buyers with the ability to trade a cryptocurrency can be a good thing for valuations. Coinbase also said it is backing a lawsuit against the Treasury Department’s sanctions on Tornado Cash and people who had used the open-source code. This is being seen as Coinbase defending the industry, which could mean it will defend altcoins and their innovation as well.
Now what
Altcoins often follow their larger counterparts, and today seems to be no different. Valuations are jumping as the entire market moves higher; these tokens are just exaggerating the moves of bigger cryptocurrencies.
What I will be watching is how the SEC handles altcoins in the long term. Many of these tokens aren’t currently registered with the SEC, and if they need to do so, it could cause turmoil for both the companies or decentralized autonomous organizations and investors. That said, I think it’s likely that more registrations are on the horizon for a host of crypto projects.
Volatility continues to be normal for cryptocurrencies, and today is no different. While the bullish sentiment has been widespread, there’s still uncertainty when it comes to the economy and each cryptocurrency’s long-term viability. Until there’s more clarity, expect big moves up or down depending on the day.
Travis Hoium has positions in Coinbase Global, Inc. and Solana. The Motley Fool has positions in and recommends Coinbase Global, Inc., Cosmos, and Solana. The Motley Fool has a disclosure policy.
