Bitcoin Climbs Back Above $31,000 After Latest Stock Dip
How strong are the crypto markets, anyway?
Bitcoin and other cryptocurrencies rebounded Wednesday after a wide sell-off saw the world’s largest digital coin sink below the $30,000 mark for the first time since late June.
At press time, Coindesk showed Bitcoin had recovered to $31,830 following a brutal dip that hit the crypto market en masse. The uptick represents a 7.38 percent value increase in the last 24 hours, while others like Ether and XRP climbed back around 9 and 6 percent respectively, according to CNBC.
The price drop was presaged by news that the New Jersey attorney general issued a cease and desist letter ordering crypto lending firm BlockFi to stop offering interest-bearing accounts.
A reason for the subsequent recover is unclear, but cryptocurrency values are notoriously volatile, with Bitcoin often setting the market trend. Since hitting a three-month high of nearly $58,800 in early May, Bitcoin tanked to hover between $34,000 and $40,000 through late May and all of June before dropping to a three-month low of $29,600 on July 20.
As for the most recent increase, one expert believes it could be short-lived. Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno, told CNBC that the price move was likely a “dead cat bounce,” i.e. an asset’s brief recovery from a prolonged decline before a return back into a slide.
“We saw broad market rallies across the board last night as well, and I think crypto is just playing off of that,” Ayyar told CNBC.
“In general, there are lot of macro factors weighing down on risk-on assets at the moment — inflation worries, Covid, and with crypto we’ve got more specific worries such as much more regulatory oversight.”
Binance, the world’s largest crypto exchange, is under pressure from international regulators, while China is attempting to stop new coin production via cryptomining altogether.
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