The global digital assets market recorded a massive decline on Thursday, after experiencing a relief rally in recent weeks. The crypto market’s cumulative cap fell more than 3 percent over the past day, as the largest digital assets such as Bitcoin (BTC) and Ethereum (ETH) prices slid about 2 percent.
Why is the crypto-currency market down?
According to the data, the crypto market has seen a liquidation of about $144 million by more than 63K traders in the last 24 hours. However, the largest liquidation order was on Bybit for $2.7 million. This movement by traders left the market at $1.05 trillion. The 24-hour trading volume jumped 5% to $64 billion.
However, the significant drop came after Coinbase CEO Brian Armstrong said the U.S. SEC is looking to get rid of crypto-currency staking for retail users. He claimed that this may turn out to be a terrible path for the nation.
Brian Armstrong stated that staking is an important innovation in the crypto industry because it allows users to participate directly in the management of open crypto networks. This innovation has brought many positive improvements to the industry, including scalability and security, while reducing the carbon footprint.
However, the SEC’s investigation of crypto-currency exchange Kraken for violating securities offering rules has had a significant impact on the market.
Is Ethereum a security?
If this is true, it may prove to be bad news for the market as it will lead to an action to prove that ETH is a security. However, this action may prove to be positive for Liquid Staking Derivative tokens as they would gain share on the exchanges.
According to reports, Kraken is likely to reach an agreement with the SEC and stop offering staking services. Meanwhile, the commission is expected to apply this precedent to Coinbase. This course of action may lead to greater uncertainty in the market.