Over the last week, there weren’t many encouraging developments in the cryptocurrency market. The Securities and Exchange Commission (SEC) of the United States has taken a strong stance against cryptocurrencies, fining exchange Kraken $30 million and ending its staking program there.
Radix (XRD 1.86%) and Fantom (FTM -2.98%) both had losses of 25.3% and 28.8%, respectively, over the last week, according to data from S&P Global Market Intelligence. NEO (NEO -4.53%), meanwhile, saw gains of up to 11.2% and is presently up 1.6% for the week.
I’ll start with the SEC’s action, which is now not totally apparent. We do know that the SEC has terminated Kraken’s Ethereum (ETH -1.29%) staking scheme and that it may pursue other programs as well. According to reports, the SEC is attempting to prevent conventional financial institutions like banks from ever communicating with cryptocurrency exchanges, which may further isolate the sector.
A blockchain with stablecoins, loans, options, and even insurance is what Radix is designed to be. The SEC’s impact is unclear, but if they’re going after staking, it’s probable that these products may be next.
The SEC may not approve of Fantom, another blockchain designed to provide yield and decentralized financial products.
The most intriguing is Neo, which features a utility token and a token for gas, or paying for blockchain transactions. This may make it possible for cryptocurrencies to evade the current ban on staking, which wouldn’t apply to all tokens.
These crypto changes this week shouldn’t be taken too seriously, in my opinion. However, given that this is a worldwide market, there has already been opposition from the SEC and congressional committees.
Ironically, the SEC’s efforts against a significant cryptocurrency exchange that has performed admirably throughout this tumultuous market are essentially supporting the bull case for cryptocurrencies in general.
It’s unclear how this will finish, but quicker crypto legislation is one option. Legislation that would clarify what a security is and how cryptocurrency businesses and exchanges must behave has already been introduced in Congress, enabling the sector to come out from under the cover of a murky legal landscape.
Although this will be something to keep an eye on, one week does not prove anything in favor of or against cryptocurrencies. Technology advancements, user and developer uptake, and the usage of these alternative currency are crucial. These remained the same this week, but if value is going to rise over the long run, the blockchain needs additional users.