The altcoins facing a tough time in July

By Stormgain | Stormgain | 4 Jul 2023


Despite the negative agenda from regulators and a series of lawsuits against market participants, June marked a month of growth for cryptocurrencies, with the total capitalisation rising 5% to $1.24 trillion.

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Bitcoin Cash (BCH) returned impressive figures, up 160%. From amongst the top ten coins, Litecoin soared by 20%.

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Nevertheless, regulators (primarily the SEC) have had a significant impact on the revaluation of coins. The aforementioned BCH and Litecoin both received a significant boost in June from the launch of the EDX Markets exchange for institutional investors in the USA. When launching the service, EDX was keen to emphasise that its service works with cryptocurrencies against which the SEC has no complaints: Bitcoin, Litecoin, BCH, and Ethereum. Despite complaints against staking, Ethereum was not classified as a security in the lawsuits.

But amongst the big projects that have come under fire from the regulator are Solana, Cardano and Polygon. They were labelled as securities, which led to negative results for the month of June.

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From the looks of things, they won't fare any better in July either. Firstly, because of the SEC's stance, market participants are turning their backs on the coins in question. US-registered Revolut, for example, notified its customers on June 29 of a ban on the purchase of Solana, Cardano, and Polygon. On September 18, there will be a forced sale of these coins which remain in customers' accounts. Similar steps had already been taken by Robinhood, eToro, and Bakkt.

Secondly, on June 30, the court allowed Celsius to start converting altcoins into Bitcoin and Ethereum, something we warned about in mid-June. MATIC (Polygon) is the second one after Celcius, facing the most pressure due to the sell-off of the CEL token - it owns 90 million coins worth $61m.

Relative to the $6.4bn capitalisation, this amount might seem insignificant, but coupled with the negative news backdrop, an increase in supply does not bode well for MATIC. In addition to MATIC, Celsius also has 161,000 SOL (Solana) worth $31m and 103 million ADA (Cardano) worth $30m.


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