Amid the intensive regulatory crackdown which was witnessed in the past weeks, the altcoin markets have seen a tension in the market. Sources reveal that in the past month, altcoin markets have seen a tug of war kind of situation between positive and negative news driven by the major events.
In its recent weekly report, Glassnode, an on-chain analytics firm, assessed the changes in the altcoin market following the recent significant events. The report listed the events like the lawsuits, ETF fillings and the landmark judgement in the SEC versus Ripple case. To begin with, in early June, the SEC labelled 68 cryptocurrencies as unregistered securities in lawsuits against various crypto exchange. This had put a damper on market interest in altcoins outside Bitcoin and Ethereum.
Secondly, the Bitcoin spot ETF filings by financial giants like BlackRock and Fidelity resulted in an uptick in market sentiment, spilling over beyond Bitcoin and into the wider digital asset space.
Moreover, the verdict of the Ripple Labs vs. SEC case in mid-July, which ruled that the crypto company did not violate federal securities law by selling its XRP token on public exchanges, sent a positive signal for other US-based crypto projects and the industry in general.
Notably, the remarkable judgement provided some hope for altcoin investors regarding robustness against further regulatory action.
Data suggests that in particular, tokens related to the DeFi sector have seen the strongest performance, with the DeFi index price rallying 56% since the low set on 11-June. Additionally, other prime market areas such as GameFi and staking have under-performed by comparison.
In its report, Glassnode featured top 8 DeFi tokens by market capitalisation the DeFi index which has also established an almost two-month-long uptrend relative to Ethereum. Reportedly, this is the first outperformance since September 2022, and with very similar performance thus far.
Further, Glassnode highlights that among the top tokens, two tokens stand out as primary drivers of this trend: Maker (MKR) and Compound (COMP). Analysts suggest that the performance might be closely related to new project fundamentals, rather than wider market developments.
In a recent move to the COMP market, COMP founder and CEO, Robert Leshner, announced his departure from the protocol. It was accompanied by the launch of a new project that focuses on bringing regulated finance to blockchain networks. Following this event, the token surged by up to 83% in one week.
Simultaneously, the prospect of removing approximately $7 million worth of MKR in one month caused the token’s price to increase by up to 43% on the week.
Additionally, amid all these events, the report studied the DEX vs. CEX exchange flows for the top eight DeFi tokens. Reportedly, the recent trend highlights a relative share of volume traded on DEXs has increased from 3.75% at the beginning of June to 29.2% today, close to the highs seen during the second half of 2022.
As evident from the graphs and report, the regulatory environment surrounding digital assets has been back-and-forth in 2023, with a varied split of positive and negative news. However, in the recent weeks, DeFi tokens in particular have experienced out-performance, led by MKR and COMP.
While the altcoin market has been driving large profits signaled by the increasing price range, Bitcoin and Ethereum markets have been largely stable. The volatility levels for these crypto assets are touching record low figures whereas the investors have continued hodling while witnessing increasing profits.