Crypto Market Recovers from Early Slump as Ethereum Classic Jumps 16%
Capital flowed back into cryptocurrency portfolios Monday, as the market resumed its upward trajectory from last week’s lows. Among the most notable moves were bitcoin’s brief rally north of $9,000 and Ethereum Classic jumping double-digits to nearly two-week highs.
Broad Recovery Continues
Digital currencies enjoyed a broad upswing on Monday, as the market recovered more than $50 billion from Sunday’s lows. Bitcoin saw its value rise more than 6% to a daily high of $9,071. It was last seen trading around $8,800.
Ethereum Classic was among the biggest gainers, climbing 16% to $29.04. That was its highest level since Jan. 30. With the gain, Ethereum Classic saw its market cap rise to nearly $3 billion.
Meanwhile, Ethereum gained nearly 4% to $888. Ripple’s native XRP token rose 3% to $1.08.
At the time of writing, the cryptocurrency market’s total value was $431 billion, according to data provider CoinMarketCap. The market rallied to a high of $458 billion on Saturday before being dragged back below $400 billion the following day.
Market Outlook Improves
Though far less dramatic than the rally that started off the year, the market’s recent gains tell a much more important story – cryptocurrencies have now climbed more than 50% from last Tuesday’s lows. The size of the rally suggests cryptocurrencies are riding a bullish wave after regulatory worries triggered a technical exodus from the market.
It is also interesting to note that market fundamentals have remained more or less unchanged over the past six weeks, a period that has been marked by record highs, bearish reversals and multiple recovery attempts. The one crucial difference since last week is how investors view the regulatory threat in jurisdictions like the United States.
The SEC and CFTC gave no indication of an overbearing crackdown on cryptocurrency trading last Tuesday when their leaders testified before the U.S. Senate Banking Committee. If anything, the powerful regulators indicated that market forces would largely dictate the future of digital assets, albeit with the strong possibility of greater regulatory oversight.
On the regulatory front, the next major meeting of consequence for the cryptocurrency market will be next month’s Group of 20 summit in Buenos Aires. It is here that French and German policymakers will propose new regulations targeting cryptocurrency.
On Monday, Christine Lagarde of the International Monetary Fund (IMF) said crypto regulations are “inevitable.” Speaking to CNN Money, Lagarde said cryptocurrencies are likely involved in “quite a bit of dark activity,” adding that, “we are actively engaged in anti-money laundering and countering the financing of terrorism. And that reinforces our determination to work on those two fronts.”
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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