The cryptocurrency market has experienced significant volatility in the past 24 hours, with a market capitalization shrinkage of approximately $66 billion, currently hovering around $3.74 trillion. Despite the U.S. Securities and Exchange Commission (SEC) launching the "Project Crypto" initiative aimed at promoting blockchain innovation, the market's response has been unexpectedly negative.

The new initiative announced by SEC Chairman Paul Atkins aims to modernize the regulatory framework for the U.S. encryption market, including providing interpretive guidance, regulatory exemptions, and safe harbor provisions. This plan builds on previous policy foundations and aims to create a more favorable environment for Web3 innovation.

Meanwhile, the Ethereum network faces potential security challenges. On the 10th anniversary of Ethereum, developer Justin Drake raised a concerning question: advancements in quantum computing technology could pose a threat to the security of Ethereum. He urged the network to consider adopting hash-based encryption to enhance security in order to address the risks that future quantum computers may bring.

Despite the overall downtrend in the market, the total market capitalization of cryptocurrencies remains above the critical support level of $3.73 trillion. This level may provide some stability to the market and create conditions for a potential rebound. Analysts believe that if the market can stabilize, the next important resistance level could be around $3.81 trillion.

The altcoin market was also affected, with SPX6900 (SPX) dropping by 8.7%, reflecting the general caution of investor sentiment.

These events highlight the complexity and uncertainty of the cryptocurrency market. On one hand, regulators are working to create a more favorable environment for innovation; on the other hand, technological advancements have also brought new security challenges. For investors and industry participants, while paying attention to short-term market fluctuations, it is also necessary to closely monitor these important trends that may affect the long-term development of the industry.