The Federal Reserve recently decided to pause rate hikes, which is one of several factors affecting the cryptocurrency market. The SEC continues its campaign to get crypto under its jurisdiction. On June 5 and June 6 the commission filed lawsuits that claim 68 cryptocurrencies in total are securities. Additionally, SEC Chair Gary Gensler has even gone so far as to claim that everything other than Bitcoin (BTC-USD) is a security. If it smells like regulators ran amok, it probably is.
Liquidity is falling though, as investors withdraw funds in anticipation of further regulatory action. Crypto investors need to remain stalwart in their original desire to invest in a financial system outside of traditional oversight. Thus, the more investors back down by divestiture, the more the SEC gains.
That said, with the Fed pausing rate hikes, there are reasons to be optimistic once again. Here are seven cryptos to buy, for those betting that regulatory headwinds won’t overshadow macro tailwinds in the near-term.
| BTC-USD | Bitcoin | $30,036 |
| ETH-USD | Ethereum | $1,893 |
| SOL-USD | Solana | $16.96 |
| MATIC-USD | Polygon | $0.676 |
| ADA-USD | Cardano | $0.295 |
| XRP-USD | Ripple/XRP | $0.497 |
| DOGE-USD | Dogecoin | $0.066 |
Bitcoin (BTC-USD)
Bitcoin is the grandfather of crypto, and remains the most important name in the sector. As Bitcoin goes, so goes the rest of the crypto market. That bellwether status is a function of investor sentiment. And that’s why it’s especially important to consider investing in Bitcoin right now.
It should be more apparent to crypto investors than ever that regulators will do everything within their power to bring crypto under their purview. Every time Gensler and his cronies launch an attack on crypto, it strikes fear in the hearts of investors.
But Gensler has admitted that Bitcoin is not a security, and therefore, this top crypto is at no risk of falling under the SEC’s jurisdiction. It’s safe. But it’s also a bellwether for the crypto sector, and when it rises, its gravity pulls the prices of other cryptos higher.
Let me say that again – Bitcoin is safe, and carries tremendous power in pulling other flagging cryptos higher due to its outsized role in this market. If there has ever been a time for crypto purists to invest in Bitcoin, it’s now.
Ethereum (ETH-USD)
Most of what I just mentioned about Bitcoin applies to Ethereum (ETH-USD), with the exception of Gary Gensler’s belief about its security status. He believes Ethereum to be a security, unsurprisingly. It is a crypto that is vital to the overall landscape and serves as a bellwether for other, smaller coins and tokens.
What investors should understand about Ethereum is that former SEC Director William Hinman didn’t believe it to be a security. That news was revealed as part of the recently unsealed Hinman documents that are central to Ripple’s ongoing security status case against the SEC (more on that later).
Suffice it to say that the discussion around what constitutes a security in the crypto realm will be increasingly important. For now, Etheruem appears to be classified as a commodity, at least according to commentary we’ve heard thus far.
Thus, while Etheruem has dipped along with the broader sector, its recovery has been even more impressive. Gensler is facing significant push back and his heavy-handed tactics have resulted in a congressional bill to remove him from his SEC post. Whether or not that happens, I think Etheruem will stand the test of time. This is a crypto to buy now.
Solana (SOL-USD)
Solana’s (SOL-USD) current troubles can mostly be directly attributed to the SEC’s regulatory onslaught. The lawsuits filed on June 5 and June 6 galvanized a sharp drop in prices for SOL. Then, on June 9, Robinhood (NASDAQ:HOOD) announced it would delist Solana and the two cryptocurrencies immediately below.
SEC regulatory pressure is clearly having its desired effect. Holders of those three cryptos have to sell their positions by June 27, or face liquidation if they take no action. The fear Gary Gensler intended with his actions is indeed occurring.
There’s little being offered at this point to explain why Solana was chosen for delisting. But Solana’s price did plummeted from $21 to below $15. Some market followers suggest $15 is a key price level for Solana and that should prices fall further, real issues will emerge. Thankfully, Solana is back to trading near $17 per token at the time of writing.
The SEC is hell-bent on taking everyone to court in an effort to bring all cryptocurrencies under its jurisdiction. Investors have to remain steadfast in their belief that the Hinman document release and the timing of this barrage are correlated. If Solana investors liquidate those Robinhood holdings, they can reinvest in Solana elsewhere. With enough like minds, Solana’s price should rise.
Polygon (MATIC-USD)
Polygon (MATIC-USD) has lost roughly a quarter of its value this past week. It’s the same story here. SEC regulatory oversight has reached a fever pitch, leading Robinhood to delist MATIC.
Holders should liquidate, reinvest on other platforms, and show the authority figures that their fear tactics won’t work. That will prop prices up immediately. The SEC’s lawsuits will take time to work their way through the court systems. There is no way to know how sentiment will ebb and flow at this point. Indeed, we only know that the Hinman documents favor cryptocurrencies and not the SEC right now.
Polygon is also a uniquely cheap options among top-tier cryptocurrencies. It’s still useful in scaling the Ethereum network and building internet-like connectivity across the crypto sector. Investors can vote with their dollars now. Those dollars have more power than they did just weeks prior.
Should investors believe that the SEC wants to simply regulate crypto while allowing it to grow? I’d say no. It’s more likely that they would prefer to regulate it out of existence, as it poses an existential threat to the status quo. Polygon is currently central to the argument against this view.
Cardano (ADA-USD)
Cardano’s (ADA-USD) recent drawdown is likely over according to Frank Corva, a well-known name in the cryptocurrency space. He characterizes the recent price collapse as little more than a fear-based reaction to bad news. He thinks the worst is over, and reasons that Cardano’s fate will require several years of litigation to be decided.
The idea is that Binance’s (BUSD-USD) legal battle with the SEC is going to play out over a period of several years. He also notes that Cardano’s forced liquidation from Robinhood could precipitate another drop in the coming weeks. Those ADA owners are already facing losses in many cases. Those who cash out and lick their wounds at a loss aren’t gaining anything. There’s a real possibility that ADA will rebound prior to June 27 if its proponents remain steadfast. After that date, the likelihood increases.
Cardano is still building via a slow, evidence-based approach that remains highly likely to lead to long-term utility. Nothing has changed with this token, and I remain bullish.
XRP (XRP-USD)
XRP (XRP-USD) is central to many important forces rippling across cryptocurrency. The SEC filed a lawsuit claiming it was a security back in December of 2020. Documents related to former SEC Director William Hinman are central to the court case. Those documents had been sealed and thus inadmissible in a court of law as evidence.
Judge Annalisa Torres ruled that they must be unsealed in May. Those documents contained damning evidence to the SEC’s case in the form of Hinman’s opinion that Bitcoin and Ethereum never constituted securities offerings. By extension, XRP is believed not to be a security.
The admission of those documents into the Ripple vs. SEC case was a big win, and XRP’s price unsurprisingly moved higher on the news. However, the SEC’s recent lawsuit filings effectively erased those gains.
Again, fear is at play here. XRP continues to have the upper hand in its court battle. It remains likely to win its case, and is one of the top cryptos to buy for investors looking to buy the fear.
Dogecoin (DOGE-USD)
Dogecoin (DOGE-USD) remains as worthless as ever from the standpoint of real-world utility. But it is also proving yet again that it feeds on chaos. Its value has declined far less than other major cryptocurrencies over the last week.
Remember, Dogecoin is the original meme coin, and proudly derives value from its staunch army of backers who want to prove that centralized authority doesn’t apply to them.
However, Dogecoin is also subject to the power of so-called whales who exert substantial influence. Those whales have been selling, largely due to macro factors tied to the Fed’s recent rate hikes. However, with those out of the way, many are calling for a renewed comeback with this token. Overall bullishness in the crypto sector should continue to bolster speculative assets to a greater degree. There are few more speculative tokens than Dogecoin for investors to consider, as highly-leveraged ways to play this move.
Notably, DOGE has seen a relatively smaller decline than many of the tokens on this list of late. Thus, I think Dogecoin may paradoxically be a stronger hedge against further headwinds, making this a token worth considering right now.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
