Rumors that the US will ban these altcoins
Liquid collateralized altcoins have surged as investors turned to decentralized staking products following rumors that their centralized counterparts could face a ban in the United States.
SEC Liquidity in Liquid Collateralized Altcoins
According to data provided by cryptocurrency data platform CoinGecko, while the liquidity staking industry rose by an average of 5.4%, the total cryptocurrency market value fell by 3.4%. The token LDO of Lido DAO, the leader in the liquidity staking industry, rose by more than 10% on the day. Rocket Pool’s RPL and Stader’s SD are up more than 10% in the past 24 hours.
Liquidity staking refers to ETH staked for tokenized versions of Ethereum (ETH) that can be used in decentralized finance (DeFi) applications. Uses range from using these tokens as collateral for loans or margin trading to earning a profit.
The movement to liquidate altcoins began after Coinbase CEO Brian Armstrong tweeted that the U.S. Securities and Exchange Commission (SEC) had heard rumors that it wanted to ban retail investors from holding cryptocurrencies .
Equity assets worth $42 billion
According to a report by Staked, a non-custodial staking service provider, the value of staking assets in the fourth quarter of 2022 is about 42 billion U.S. dollars, and the annual staking income is 3 billion U.S. dollars. Let us emphasize that this figure is not limited to individual investors. Prominent figures in the cryptocurrency community on Twitter said that these funds are flowing into DeFi alternatives such as Lido DAO and Stader, which may explain the sudden increase in the price of the corresponding altcoins.
Rumor has it that the SEC will ban cryptocurrency staking ahead of next month’s highly anticipated Ethereum Shanghai update, which will allow investors to withdraw their ETH staked on the ethereum blockchain. ETH staked on the Ethereum network cannot currently be withdrawn.