Bitcoin Plummets After SEC’s Crushing Blow to Kraken

The cryptocurrency market dips as Bitcoin drops 6% while Kraken agrees to settle charges with the SEC.

KrakKraken freezes FTX and Alameda Research accountsen freezes FTX and Alameda Research accounts
  • Bitcoin has experienced a 6% dip in value, trading at $21,600.
  • Market analysts are divided on the future of Bitcoin due to comments by Coinbase’s CEO.
  • The settlement with Kraken has indicated the SEC’s stance on other crypto-staking services offered by exchanges and platforms.

On February 10, 2023, the cryptocurrency market experienced a dip as Bitcoin, the largest cryptocurrency by market capitalization, dropped from $23,000 to trade at $21,600, a decrease of 6% in just 24 hours. 

The decline was largely due to news of crypto exchange giant Kraken agreeing to settle charges with the U.S. Securities and Exchange Commission (SEC) and shutter its U.S. cryptocurrency staking operations.

Impact of Kraken’s Settlement with the SEC on the Crypto Market

The SEC announced that Kraken would end its crypto staking-as-a-service platform for U.S. customers and pay a $30 million fine for offering unregistered securities. Ether (ETH), the second-largest cryptocurrency, followed a similar trend, recently trading at an 8% decrease, reaching $1,520. 

The news from Kraken came just a day after the CEO of Coinbase tweeted about rumors of the SEC wanting to eliminate crypto staking in the U.S. for retail customers, leaving some market analysts divided on the future of Bitcoin. Some anticipate a drop to the $20,000 support level due to persistent job data and monetary policy, while others believe this will lead to a temporary lull before another price surge.

Market Insights and Indicators

According to Mauricio Di Bartolomeo, the co-founder of a crypto lending platform Ledn, the absence of short Bitcoin liquidations suggests there may be more sideways trading in the near term.

Although the hype surrounding Bitcoin has decreased, the network has historically experienced a resurgence in popularity after periods of doubt, as noted in Messari’s latest quarterly report on Bitcoin. The report cites the movement of large amounts of Bitcoin from centralized exchanges to self-custodial wallets and growth in daily active addresses and transactions as indicators of a potential market bottom and persistence of long-term investor confidence.

On the Flipside

  • Though Kraken did not confirm or deny the allegations in the SEC’s complaint, the exchange agreed to halt its staking service for U.S. clients.
  • Although Bitcoin has experienced a price drop, the Fear and Greed metric has only returned to a neutral value.
  • This price drop was expected as a rising wedge was observed in advance.

Why You Should Care

Having a clear understanding of significant events in the cryptocurrency market, such as the recent drop in Bitcoin’s value and the agreement reached by Kraken and the SEC, can give valuable perspectives on the industry’s current status and shape future advancements. The settlement with Kraken may indicate the SEC’s stance on other crypto-staking services offered by exchanges and platforms, as they are perceived as securities.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.