Bitcoin’s (BTC) dominance, or its share of the total crypto market, dropped sharply on Thursday after a U.S. court ruling complicated the Securities and Exchange Commission’s (SEC) plan to regulate digital assets and boosted hopes for a sustained rally of alternative cryptocurrencies, also known as the “alt season.”
The ruling came from the District Court for the Southern District of New York in the SEC’s case against Ripple Labs for violating securities law through XRP sales. The court decided that XRP is not a security when offered to individuals through centralized exchanges, but is one when sold directly to institutions.
The Ruling on XRP Case Had a Massive Impact on the Crypto Market Today
The US Securities and Exchange Commission (SEC) has been trying to regulate cryptocurrencies as securities. However, a recent ruling by federal Judge Analisa Torres challenged the SEC’s plan to categorize all altcoins as securities and subject them to stringent oversight.
According to the verdict, Ripple’s XRP token does not fall under the SEC’s regulatory purview as a security. The court decision triggered a sharp drop in Bitcoin’s dominance rate, which slid 2.6% to 50.14%, the lowest level since June 13, 2022.
On the other hand, altcoins such as XRP, SOL, MATIC, and ADA posted impressive gains of more than 10%, outperforming Bitcoin significantly. Some analysts expect this trend of altcoin dominance to persist in the near future.
According to Decentral Park Capital, “Alt season may be upon us following the Ripple news as indicators collectively suggest risk appetite is funneling down the risk continuum.” They also mentioned that “With the U.S. dollar breaking down and the inflation battle nearing the end, it appears to be game on for investors.”
Noelle Acheson, who writes the Crypto Is Macro Now newsletter, commented on the SEC ruling and its possible impact on Coinbase’s legal case with the SEC. She cautioned that it would be premature to expect a significant surge in altcoin prices as a result of the ruling.
The SEC’s decision to sue Coinbase and Binance, two of the largest cryptocurrency exchanges in the world, for allegedly selling unregistered securities has created a lot of confusion and doubt among investors.
However, the outcome of this legal battle could also have a positive impact on the future of the crypto industry, as it could clarify the regulatory framework and stimulate more innovation and adoption. This could attract more capital and attention to the emerging sector, which is constantly evolving and changing.