KuCoin Token (KCS) Emerges as Top Performer Amidst CEX Regulatory Pressure

Following the renewed pressure on the majority of cryptocurrencies on Thursday, which led to a drawdown in prices, the market is taking a breather for now. 

Bitcoin is back above $25,500 with 2.5% gains on Friday after hitting a 3-month low at around $24,850 the day before. ETH is also up by 2% and exchanging hands at $1,669 at the time of writing.

Against this backdrop, the largest dollar-pegged stablecoin Tether (USDT), fell 0.20% to $0.9958, which Tether CEO Paolo Ardoino attributed to the market being “edgy,” making it “easy for attackers to capitalize on this general sentiment.” USDT is now back above $0.9987.

The total crypto market cap has also moved upwards by 2.2% to now stand at nearly $1.08 trillion after moving to its lowest level since the banking turmoil began in March.

Bitcoin price recovered after a CoinDesk report stated that the world’s largest asset manager, BlackRock, is close to filing an application for a Bitcoin ETF. The application to launch the iShares Bitcoin Trust was filed with the US Securities and Exchange Commission (SEC). If approved, the ETF would allow easy access for institutional investors to get exposure to crypto in a product from one of Wall Street’s largest companies.

“The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange,” the filing said.

BlackRock has listed Coinbase as its custodian, with which it already has a strategic partnership. Last year, BlackRock’s institutional investment platform, Aladdin, connected to Coinbase Prime for crypto trading and custody. 

So far, the regulator has not allowed the launch of a spot bitcoin ETF in the US, having rejected applications from Grayscale, VanEck, and WisdomTree. 

The SEC is currently in a legal battle with Grayscale over whether the firm will be allowed to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. The decision on the same is expected to be made later this year. 

Many other firms have filed applications to launch spot Bitcoin funds only to pull them later on.

The proposed BlackRock fund is also expected to face heavy resistance from the SEC. However, the stature of the asset manager holds significance here and may make it difficult for the agency to reject their application, which can fuel a Bitcoin rally if approved.

But there’s also the chance of filing being pulled before an ETF is ever launched. Additionally, even if ETFs ever begin trading, they typically take months to launch after an initial filing. 

The investment giant already has a fund related to crypto, the iShares Blockchain and Tech ETF (IBLC), which has less than $10 million in assets more than a year after its launch.

CEXs Face Pressure in the US, Gains Acceptance Elsewhere

The new price pressure follows the Federal Reserve assuring that while it is pausing interest rate hikes in June, it isn’t done hiking rates this year. 

Keeping the rates unchanged at 5-5.25% will allow policymakers to assess further macroeconomic data, such as any possible credit tightening, said Fed Chairman Jerome Powell. 

“Dot projections” suggest two more hikes are still on the table for 2023 as the central bank aims to bring inflation down to 2%. On another front, South Korean crypto lending platforms Delio and Haru paused withdrawals after facing heightened customer requests. 

These domestic events coincide with international regulatory actions, as the SEC has ramped up its focus on the crypto industry, filing lawsuits against crypto exchanges Coinbase and Binance. 

The Commission further alleged that 19 specific cryptocurrencies, including BNB, SOL, ADA, and MATIC, are securities and thus should be registered with the SEC.

“Until the regulatory environment is better, cryptos might struggle here,” said Edward Moya, a market analyst at Oanda.

This regulatory pressure amidst the bear market has a lot of sellers but not enough buyers. Over the last week, trading volumes on these centralized crypto exchanges (CEXs) also fell, with liquidity on Binance’s US-affiliated platform dropping by 75% following last week’s SEC charges, according to Kaiko Research.

“Everything is coming together all at once, and we have thin liquidity in markets now,” said crypto investor Thomas Dunleavy.

Thin liquidity combined with weak sentiments at the moment means a sizable sell order can do substantial damage by setting off liquidations. Moreover, no new capital is flowing into the market, with traders keeping their money off the table amidst the bear market and regulatory backlash.

But it’s not all bad, though. Hong Kong’s regulators are urging banks to take crypto exchanges as clients in a bid to emerge as a global crypto hub. This is in complete contrast to the US, which is doubling down on its crackdown on the crypto industry. 

Meanwhile, centralized crypto exchange OKX’s Middle Eastern arm has received an MVP Preparatory license from the Dubai Virtual Assets Regulatory Authority (VARA). This will allow the CEX to get ready when the license becomes operational and offer spot, derivatives, and fiat services, including USD and AED deposits, withdrawals, and spot pairs.

According to blockchain analytics firm Nansen, OKX, Binance, and Bitget are also expected to gather a combined $2 billion in nominal fiat protection funds. 

“Proof of Reserves should become the minimum standard in the exchange industry, however, as stated above, these are both positive indicators for an exchange but do not guarantee its solvency,” the firm explained.

CEX Tokens Make Recovery, KCS Emerges a Victor

Much like the broad crypto market, publicly traded crypto companies also sold off this week, including MicroStrategy (MSTR), Riot Platforms (RIOT), and Marathon Digital (MARA). The stock of CEX Coinbase Global (COIN) also tumbled under $51 before recovering on Friday above $54. 

Among the CEX tokens, the biggest name BNB is down 7% in the past week and by nearly 2% in 2023. However, today, it has started to see some greens. The native tokens of WOO Network (20%), Delta Exchange (13.5%), and OKX (10%) meanwhile have tumbled in double digits this past week.

As the SEC goes after CEXs, KCS emerged as the top performer, with more than 14% gains recorded in the past 24 hours against USD and 1% against BTC. The $683.6 million market cap coin is currently trading at $7.21, in green by 7% in the past week, though by a mere 0.67% year-to-date (YTD). 

While KCS started 2023 much like the rest of the crypto market, going from $6.50 at the beginning of the year to $9.50 in mid-March, the market sentiments have changed since then, which sent its prices downwards. 

Then last weekend, just ahead of the news of SEC going after CEXs, KCS price tanked 22%, going under $5.90 on Monday. This week, however, KCS price has surged almost 23%

With this, the trading volume for KCS tokens has soared past $7 million, recording an increase of 340% from a day ago.

With a stellar recovery this week, KCS price has risen above the 20-day simple moving average. Now, as the token moves ahead, it is facing resistance at the 50-day simple moving average of $7.2. Additionally, the Relative Strength Index (RSI) is residing within the range of 52, showing a potential upward trend ahead for the token.

Currently, one of the top trending CEX coins right now, KCS, has lost 75.5% of its value since hitting its all-time high (ATH) of $28.83 in Dec. 2021. 

KCS is the native token of KuCoin, a centralized crypto exchange founded in 2017 by CEO Michael Gan. 

The Ethereum-based token powers the entire exchange system of KuCoin, and its holders who keep it on the platform are eligible to receive a portion of the trading revenue generated by the exchange. The rewards are called KCS Bonus and are paid out daily from part of the exchange’s overall trading fee profits. Rewards are based on several factors, such as the size of one’s KCS holdings. 

KuCoin exchange users can also receive fee discounts if they hold KCS tokens in a Kucoin account when placing orders based on the amount of KCS they own. 

KCS holders who reach certain levels can enjoy special services like one-on-one investment consultation, Fast-Pass customer service, and more. The use cases of KCS aren’t just limited to the KuCoin crypto exchange but also expand to its broader ecosystem. 

KCS has a total supply of just over 144 million, out of which 96.83 million KCS tokens are currently circulating in the market. KCS burns are conducted regularly to keep the circulating supply below 100 million.

The KuCoin community also launched its own public blockchain in 2021 called the KuCoin Community Chain (KCC), an Ethereum Virtual Machine-compatible blockchain that uses KCS as its native asset. 

When it comes to the exchange, it is a Seychelles-registered platform that uses a multi-cluster and multilayered architectural system to support multiple transactions simultaneously and ensure system stability. Its encryption protocol, meanwhile, aims to ensure that user data and transfers within the system remain invisible to other users. 

In the past 24 hours, KuCoin saw an almost 16% drop in its volume to $531.7 million, according to CoinGecko. Also, KuCoin has $2,446,523,981.73 in Exchange Reserves.

In recent developments, KuCoin has introduced a new project on its KuCoin Spotlight, an initiative that serves as a platform to showcase the most promising crypto projects. 

This initiative enables users to contribute to the project’s growth by acquiring tokens in advance. The project must create an account and complete KYC verification to get featured here. These token sales can inject fresh momentum into KCS and help its price move further. 

Click here to learn all about investing in KuCoin token (KCS).