Top line
Bitcoin, Ether and other leading cryptocurrencies regained ground Tuesday, partially recovering losses after the market suffered one of its worst selloffs in years as Wall Street and global markets reeled from fears of a U.S. recession.
Bitcoin prices edged higher on Tuesday after crashing the day before.
Key facts
Bitcoin prices rose about 8% and were trading above $55,000 around 7 a.m. ET Tuesday morning.
The jump mitigates some of the heavy losses suffered by bitcoin yesterday after prices plunged to their lowest point in six months, although the token is still down nearly 17% compared to the same period last week.
Ether, the world’s second-largest cryptocurrency by market capitalization, also rebounded on Tuesday, gaining as much as 9% to above $2,450.
As with bitcoin, ether’s rise represents only a partial recovery and even with Tuesday morning’s gains, the token has lost a quarter (25%) of its value over the past seven days.
Other leading cryptocurrencies mirrored the trajectory of bitcoin and ether with small gains on Tuesday partially offsetting the previous day’s devastating losses, with Binance’s BNB, Solana’s sol, Ripple’s XRP, dogecoin and Cardano’s ada all rising at least 8% compared with weekly losses of between 15% and 25%.
Large number
$2.07 trillion. That’s the total value of the cryptocurrency market. It’s up nearly 8% in the past 24 hours, in line with the rise in the prices of Bitcoin and Ether, which account for about 53% and 15% of the market, respectively. Similarly, the gains in the cryptocurrency market over the past day have only modestly offset the considerable downturn of the past week, when the market declined by more than 16% and lost more than $400 billion in value.
Peg News
Cryptocurrency markets crashed on Monday, in one of the worst routs in the sector since two of the leading crypto assets went mainstream this year with the launch of spot-bitcoin and spot-ether exchange-traded funds in the US in January and July, respectively. Ether recorded its worst day since 2021 during the economic downturn, with bitcoin and other assets like dogecoin also falling to six-month lows. Despite the contraction, the market is still up nearly 70% since this time last year, and bitcoin hit an all-time high of nearly $74,000 earlier this year. The downturn has raised fears that the broad upward trajectory the market has been on since emerging from the depths of crypto winter in late 2022 — when the market fell below $1 trillion in aggregate value, less than bitcoin alone is worth today — is coming to an end. Volatile cryptoassets are risky investments and react strongly to sometimes unpredictable stimuli, such as the recent developments in the presidential race between Donald Trump and Kamala Harris (and Joe Biden, before he stepped down). Monday’s decline followed gloomy US jobs data that heightened fears of a US recession on the horizon. Markets across Europe, Asia and North America slumped as traders hedged against potential volatility amid the sell-off. Major US stock indices like the S&P 500, Nasdaq Composite and Dow closed at their lowest prices in months and the S&P 500 companies collectively lost $3.5 trillion in market capitalization by the end of the day.
Will Bitcoin, Ether and the Cryptocurrency Market Recover Soon?
It’s unclear whether Monday’s crash will be short-lived or if it marks the beginning of a broader market downturn. Cryptocurrency markets are highly volatile and unpredictable, but tend to largely mirror the radical moves of more traditional financial markets. A continued slowdown in the economy could signal further declines to come. The prospect of a war spreading to the Middle East and similar events has also historically had repercussions for the cryptocurrency market.
Further reading
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