Is the collective waterfall of altcoins just the beginning of regulatory impact?

Does the altcoin waterfall mark the start of regulation?

At noon today Beijing time, Bitcoin fell below 26,000 USDT, while Ethereum lost support at 1,800 USDT. At the same time, various altcoins experienced a collective plunge. Among them, ADA, MATIC, and SOL, which were delisted by Robinhood, all dropped by more than 20% in the short term. Babywhale, an author at Foresight News, analyzed the reasons behind the collective plunge of altcoins.

The divergent trends of Bitcoin, Ethereum, and other tokens may be related to regulatory impact and lack of market liquidity. Firstly, in terms of regulation, cryptocurrency market makers Jane Street and Jump Trading announced their withdrawal from the US market a month ago. The withdrawal of such large market makers from US cryptocurrency exchanges and the process of connecting with other exchanges will inevitably create a vacuum period of liquidity. Other market makers may also shrink or even exit the cryptocurrency market-making business due to concerns about regulatory uncertainty. On the other hand, since May, the performance of cryptocurrencies has begun to lag behind the US stock market, coupled with the popularity of AI concepts, and a large amount of funds have been withdrawn from the cryptocurrency market and invested in traditional financial markets with clearer expectations and better liquidity.

From a more macro perspective, although the US has passed a new debt ceiling bill to avoid default on US bonds, it also means that newly issued bonds will extract trillions of dollars in liquidity from the market. Although some analysis points out that the liquidity extracted from US bonds may come from funds that are already invested in currency fund products, this may have a significant impact on emotions and expectations for the cryptocurrency market, which is highly dependent on liquidity.

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Reference: https://foresightnews.pro/article/detail/35057

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