Cryptocurrencies Attempt a Positive Start to the Week after Wild Plunges

  • Economics
Cryptocurrencies Attempt a Positive Start to the Week after Wild Plunges

The crypto market edged higher Monday after a week of hell during which billions of dollars were wiped off the value of bitcoin and ether.

The price of Bitcoin edged upwards towards $37,000 on Monday after plummeting to less than $32,000 on Sunday. Bitcoin was up around 8% at $36,764.83 in the 24 hours leading up to 5:00 a.m. ET, according to CoinDesk, which put the market cap of the world’s most popular cryptocurrency at around $686 billion.

Meanwhile, ether, the world’s second most popular cryptocurrency, rose from less than $1,800 on Sunday to over $2,300 on Monday. It was trading around $2,296.90 at 5:00 a.m. ET – up 14% over 24 hours and with a market cap of around $266 billion, according to CoinDesk.

Elsewhere, dogecoin also showed signs of recovery, with its price rising from 24 cents on Sunday to 33 cents on Monday.

Broadly speaking, the crypto market was a sea of green on Monday, with just a small handful of lesser-known coins down in the last 24 hours. It comes after a week of turmoil that left many crypto investors shaken.

Last week’s crypto sell-off came after authorities in China and the U.S. moved to tighten regulation and tax compliance on cryptocurrencies.

Chinese authorities called for tighter regulation on crypto mining and trading on Friday, and the U.S. Treasury announced Thursday that it would require stricter crypto compliance with the IRS.

Bitcoin on Wednesday plunged more than 30% at one point to nearly $30,000, its lowest price since late January, according to Coin Metrics. The cryptocurrency peaked in April near $65,000.

The sell-off is a major reversal for the cryptocurrency, which appeared to be gaining traction among major Wall Street banks and publicly traded companies. This month, however, bitcoin has been hit by a series of negative headlines from major influencers and regulators.

Tesla CEO Elon Musk, who helped fuel bullish sentiment when his company announced in February it has bought $1.5 billion of bitcoin, delivered a blow earlier this month when he announced that the automaker had suspended vehicle purchases using the cryptocurrency over environmental concerns.

Musk subsequently sent mixed messages about his position on bitcoin, implying in a tweet that Tesla may have sold its holdings, only to clarify later that it had not done so.

“The asset class continues to be highly volatile, with the potential of significant price movements resulting from a single tweet or public comment,” CIBC analyst Stephanie Price said in a note Thursday.

A JP Morgan report showed that large institutional investors were dumping bitcoin in favor of gold, raising questions about institutional support for the cryptocurrency.

Source: CNBC