Market "Correction": Rumors Of Big Crypto Being Classified As Securities

Today, the cryptocurrency market has experienced a new drop in the middle of an upward rally that has taken the market value up by 75%. Still, big altcoins like Ripple, Ethereum and Bitcoin Cash, that had decoupled from Bitcoin and were severely overvalued are suffering a big drop of more than 10% of their market values. The chart shown below shows that.

Prices of cryptocurrencies today

Despite this, bitcoin has also dropped almost 5% after spiking to near $10,000 levels last night. This behavior seems to be in check with the theory of Tom Lee about the daily rises. He says that the cryptocurrency market is sentimental and opportunity based and that most earnings come from one-day rallies.
This situation has developed also in an uncertainty weather after a former CFTC (Commodity Futures Trading Commission) head declared that Ripple and Ethereum would probably be declared as securities. This would be a big development and would ramp up the regulations to trade these cryptocurrencies, at least in the United States.
According to declarations made by Gary Gensler, the said head of CFTC to Bloomberg, the nature of these two cryptocurrencies make them especially prone to be considered as securities. Ripple by its centralized nature, and Ethereum for its smart contracts feature, used by virtually all tokens offered by the Initial Coin Offerings. The definition of a security includes two important characteristics: the investment of money in a common enterprise, and the expectation of a percentage of earning which comes from the work of a third party.
This would make waves in the cryptocurrency market and would lead to delisting these coins from several USA-based exchanges, at least until they register as securities exchanges with the SEC, a process that could potentially last even a year, depending on the specific characteristic of each exchange. Expect a bigger correction in the near future, as the prices try to reach their support values.

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