Topline
Bitcoin, ether and other top cryptocurrencies regained ground Tuesday, partially recouping losses after the market suffered one of its worst selloffs in years as Wall Street and global markets reeled over fears of a U.S. recession.
Bitcoin prices edged upwards on Tuesday after crashing the day before.
Key Facts
Bitcoin prices rose around 8% and were trading above $55,000 around 7 a.m. EST Tuesday morning.
The jump mitigates some of the heavy losses bitcoin suffered yesterday after prices plunged to their lowest point in six months, though the token is still down nearly 17% from this time last week.
Ether, the world’s second top cryptocurrency by market value, also rebounded on Tuesday, gaining as much as 9% to more than $2,450.
As with bitcoin, ether’s climb represents only a partial recovery and even with the gains on Tuesday morning, the token has lost a quarter (25%) of its value over the past seven days.
Other top cryptocurrencies mirrored the trajectory of bitcoin and ether with small gains Tuesday partially offsetting devastating losses from the day before, with Binance’s BNB, Solana’s sol, Ripple’s XRP, dogecoin and Cardano’s ada all rising at least 8% in the face of weekly losses between 15% and 25%.
Big Number
$2.07 trillion. That’s the total value of the cryptocurrency market. It has grown nearly 8% in the last 24 hours alongside rising prices for Bitcoin and Ether, which make up around 53% and 15% of the market, respectively. Similarly, the crypto market’s gains over the past day only modestly offset the considerable downturn from the past week, when the market shrank more than 16% and shed more than $400 billion in value.
News Peg
Cryptocurrency markets crashed on Monday in one of the sector’s worst routs since two of the top crypto assets went mainstream this year with the launch of spot-bitcoin and spot-ether exchange-traded funds in the U.S. in January and July, respectively. Ether notched its worst day since 2021 in the downturn, with bitcoin and other assets like dogecoin also sinking to six-month lows. Even with the contraction, the market has still grown nearly 70% since this time last year and bitcoin reached an all time high of nearly $74,000 earlier this year. The downturn has ignited fears that the broad upward trajectory the market has been on since emerging from the depths of the cryptocurrency winter in late 2022—when the market dipped below $1 trillion in overall value, less than Bitcoin alone today—could be over. The volatile crypto assets are risky investments and respond sharply to sometimes unpredictable stimuli, most recently developments in the presidential race between Donald Trump and Kamala Harris (and Joe Biden, before he dropped out). Monday’s decline follows grim U.S. jobs data that intensified fears of a U.S. recession on the horizon. Markets across Europe, Asia and North America crashed as traders hedged against potential volatility in the midst of the selloff. Major U.S. stock indices like the S&P 500, Nasdaq Composite and Dow closed with their lowest prices in months and the 500 companies on the S&P collectively lost $3.5 trillion in market capitalization by the end of the day.
Will Bitcoin, Ether And The Cryptocurrency Market Pick Up Soon?
It’s not clear whether Monday’s crash will be short lived or if it signals the start of a broader market downturn. Crypto markets are highly volatile and unpredictable but largely tend to mirror sweeping movements in more traditional financial markets. A continued downturn in the economy could signal further drops to come. The prospect of a broadening war in the Middle East and similar events have historically trickled down into the crypto market as well.
Further Reading
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