Bitcoin, Ether and stablecoins have increased their dominance in the cryptocurrency market to its highest level since February 2021, as investors have fled from smaller tokens following last week's regulatory crackdown. Altcoins have suffered a dramatic sell-off after the US Securities and Exchange Commission (SEC) deemed multiple tokens securities in lawsuits against crypto exchanges Binance, Binance.US and Coinbase.

If the SEC's allegations are proven right, token issuers and exchanges would face a mounting burden to register with the SEC, which could limit liquidity further onwards and lead to a prolonged slow market. The legal battle could drag on for years, impeding capital inflows to the assets under SEC scrutiny and propelling the investment case for BTC and ETH as safer bets from regulatory risks.