Digital currencies are clawing their way back from the brink.
In response to the US regulator's latest securities classification, several cryptocurrencies, including Algorand (ALGO) and Flow (FLOW), experienced a precipitous drop in value, plunging to historic lows.
Upon announcement of their categorization as securities by the US Securities and Exchange Commission (SEC), ALGO and FLOW suffered significant losses, with their values tumbling to record lows of $0.098 and $0.46, respectively, as of June 10th. Crypto data indicates a decrease of nearly 30% for each currency over the preceding week.
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In an encouraging twist, both cryptocurrencies showed signs of resilience, as evidenced by their recent price rebounds. Post the tumultuous phase, ALGO experienced an upsurge of over 12.5%, and FLOW followed closely behind, with a resurgence of approximately 10.5%.
At the time of writing, ALGO and FLOW retail for $0.1104 and $0.4945, respectively.
Notably, the SEC's move to sue prominent crypto exchanges Coinbase and Binance, and designate 16 new cryptocurrencies as securities, was a forerunner to this market disruption. Currently, SEC has labeled over 60 cryptocurrencies as securities.
A few other cryptocurrencies, like Solana (SOL) and Polygon (MATIC), were also entangled in the securities dragnet cast by the SEC.
However, the organizations behind these digital assets promptly dismissed the SEC's allegations.
Polygon Labs responded to the accusations against MATIC, stating that it was conceived and launched outside the United States, never specifically targeting the US market.
Similarly, the Solana Foundation expressed disagreement with the SEC's characterization of SOL as a security.
The cryptos' defiant stand against the SEC's charges and their subsequent price recovery demonstrate the volatile yet resilient nature of the digital currency market. It will be crucial to keep a close watch on the actions of regulatory authorities and the cryptos' response to the evolving scenario.
