The market value of cryptocurrencies fell below $1 trillion between June 2022 and June 2023, with laws profiting greatly from this decline. DappRadar, a global retailer of decentralized applications (dapps), compared how various currencies have reacted to regulations to determine the extent to which regulatory organizations have affected it.
Due to turmoil in US regulatory affairs, the crypto market valuation crashed and $40 billion was lost. Nevertheless, despite a 30% decrease in the value of altcoins, Bitcoin and Ethereum have shown strength. DappRadar identified five distinct elements that contributed to the market fall.
Web3 Pano changes
Many organizations have tried to establish a presence in the US, which has served as a breeding ground for innovations in the cryptosphere. However, a number of exchanges have decided to leave the country in response of recent US Securities and Alternate Fee moves.
Notably, the SEC has filed litigation against Coinbase, the most renowned US-based exchange, and both the cryptocurrency exchange Binance. These platforms were accused of selling unregistered securities by the regulating body. Popular cryptocurrencies including Solana (SOL), Polygon (MATIC), The Sandbox (SAND), and Axie Infinity (SAND) were among them.
The SEC has been monitoring Coinbase in the past as well. It had already bought a Wells Discover before the June filing of the case. Because of this, confrontations between the SEC and the cryptocurrency market were expected. However, according to DappRadar, Binance’s lawsuit caused traders to be unsure of the direction the crypto market will take going forward, which led to a large sell-off.
Some organizations are looking to leave the country as a result of the SEC’s ongoing actions. Following its Wells Discover, Coinbase has made a suggestion that it would move its corporate offices to Bermuda. The crypto exchange is not alone, though; another exchange, Crypto.com, has also left the US market. The private venture capital firm that supports cryptocurrencies, Andreessen Horowitz, has followed suit and moved its headquarters to London.
Bitcoin remains robust.
The value of most cryptocurrencies has decreased after the restrictions were tightened. Bitcoin is one cryptocurrency that needs to be kept an eye on, though.
On June 4, bitcoin’s value dropped from $27,000 to $25,000. However, according to data from Whalemap, there has been a significant increase in the number of unique addresses with a stability of more than 10,000 Bitcoin. Perhaps Gary Gensler, the head of the SEC, had the vision to turn cryptocurrency into a commodity. Regardless, Bitcoin continues to thrive and grow despite price drops.
Not all cryptos have the same fate.
The ongoing legal battles between Binance and Coinbase have caused a significant upheaval in the cryptocurrency market. With losses of 41.60 percent and 40 percent, respectively, FLOW and Chilliz (CHZ) suffered the most severe blows of the 13 items we examined. They dropped by more than 95% from their previous high, as a result. This abrupt decline fits with altcoins’ natural volatility and supports the current narrative of Bitcoin’s growing market domination.
DEXs have noticed a rippling effect The SEC’s activities have also been felt by decentralized exchanges (DEXs). Consider Stargate Finance and Uniswap. From June 5 to 9, pockets activity decreased on the former, which is renowned for its cross-chain liquidity protocol that makes asset transfers and swaps among blockchains, layer-2 networks, and dapps simpler. However, after that, its amount hit $1.6 billion before falling by around 53.98% the next week.
The greatest DEX for buying and trading, Uniswap, has observed a decline in unique lively wallets (UAW). However, the volume of transactions on the site has been steadily increasing. It registered a total amount of $16.68 billion, indicating the general market environment and the downward trend in cryptocurrency prices.
“The current regulatory occasions have unquestionably impacted the crypto and dapp panorama, prompting a major market shakeup,” writes Sara Gherghelas, a blockchain analyst at DappRadar. The effects of the ‘regulatory FUD’ have become glaringly apparent as the market capitalization of cryptocurrencies falls below the $1 trillion threshold.
“While these events have undoubtedly given the dapp industry a challenging landscape, they also serve as a difficult but crucial lesson. Through such tests, the market is trimmed, allowing only the strongest and most robust projects to withstand the test and ultimately triumph. That represents another milestone in the crypto and dapp sectors’ continued development and is evidence of their adaptability and resilience in the face of changing regulations and choppy market conditions.