As attention to the crypto market grows, no-utility tokens face potential extinction due to increased regulations.
Growing Attention to the Crypto Market
The cryptocurrency market has seen a huge influx of investors due to the approval of Bitcoin and Ether exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). This approval has opened a pathway for traditional investors to engage with the digital assets sector, boosting the market to new heights. Currently, according to Coinmarketcap, the market is valued at over $2.34 trillion.
Increasing Call for Crypto Regulation
Many no-utility tokens, often considered meme coins, are seen as vulnerable due to growing regulatory scrutiny and investor influx. Regulators in Europe have called for amendments to MiCA regulations to meet new standards, highlighting the potential focus on meme coins under stringent regulatory stipulations.
Why No Utility Cryptos May Struggle Under Regulations
No-utility tokens relying on hype and community support may be pushed out of the market due to stringent regulations. Effective regulation examines projects' operations and their compliance with securities standards. Cryptocurrencies classified as securities are likely to face difficulties in compliance due to lack of substantial utility, risking investor withdrawal.
The future of no-utility cryptos is uncertain under regulatory pressure. Yet, adaptable projects with strong community backing can still thrive by adjusting to the new landscape.
