The crypto market weakened noticeably on May 22 after the U.S. Securities and Exchange Commission (SEC) delayed a planned exemption for tokenized stocks. According to foreign media citing informed sources, the SEC had considered providing broader exemptions for U.S. crypto companies trading tokenized assets linked to U.S. equities, but the plan has been temporarily postponed.
Concentrated liquidation of long positions
After the news broke, Bitcoin briefly dropped toward $76,000, continuing the selling pressure from the previous week. According to CoinGlass data, the total liquidation of long positions in the crypto market that day amounted to approximately $320 million, with about $296 million coming from long positions.
- Cryptocurrency market longs liquidated at approximately $320 million
- Long positions account for approximately $296 million.
- Bitcoin once dropped toward $76,000.
Tokenized stock expectations are cooling down
This round of volatility first emerged in the derivatives market. Previously, some traders had already positioned themselves in anticipation of regulators potentially opening the door to tokenized stock trading; thus, following the announcement, leveraged long positions were quickly liquidated, amplifying the price decline.
Tokenized stocks are digital trading products linked to the prices of U.S. stocks, issued on blockchain technology. Currently, certain platforms outside the United States offer these products to non-U.S. users, enabling them to gain exposure to U.S. assets such as Apple and Tesla via on-chain mechanisms.
Continuous outflows from ETFs are putting pressure on prices.
If the SEC approves broader exemptions, U.S.-registered crypto platforms could also enter this market. Previously, the market generally believed this would create significant additional space for tokenized securities. This delay means the pace of progress for related businesses in the U.S. has slowed once again.
In addition to regulatory news, Bitcoin spot ETF fund flows are also exerting pressure. Reports indicate that Bitcoin ETFs have experienced net outflows for six consecutive trading days, reflecting equally cautious sentiment among institutional funds.
Slower regulatory progress, continued outflows from ETFs, combined with concentrated liquidations of highly leveraged long positions, have quickly corrected previously optimistic short-term market positions. The focus moving forward remains on the pace of progress regarding U.S. tokenized equities regulations and other crypto regulatory issues.