The price of Bitcoin and other cryptocurrencies recovered well today after a brutal sell-off, with the world’s leading cryptocurrency by market cap climbing back above $30,000. Bitcoin rose almost 6% in the last 24 hours to $31,400 at the time of writing, according to Coinmarketcap data. Smaller cryptocurrencies, ether, and XRP also rebounded, up around 7% and 3%, respectively. The entire crypto market saw significant selling on Tuesday, with bitcoin falling below the $30,000 mark for the first time since June 22.
New Jersey attorney general issued a cease and desist letter to crypto lending firm BlockFi.
The plunge in the entire crypto market coincided with the news that the New Jersey attorney general issued a cease and desist letter to crypto lending firm BlockFi, ordering it to stop offering interest-bearing accounts. The reason for the move higher Wednesday wasn’t immediately clear. Cryptocurrencies often undergo severe price swings. Bitcoin, for example, rallied to an all-time high of almost $65,000 in April before halving in value in the months that followed.
Regulatory pressure affects cryptocurrency prices.
Cryptocurrencies have been on a downward trajectory amid a growing crackdown on the industry from regulators across countries. Chinese authorities have sought to stamp out crypto mining, the process which validates transactions and produces new coins. Meanwhile, Binance, the world’s leading crypto exchange, is facing intensifying pressure from regulators in the U.K., Italy, and elsewhere. Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno told CNBC that the current price move was likely a “dead cat bounce,” where an asset briefly recovers from a prolonged decline before continuing to slide. Unless bitcoin can climb above $32,000, he expects more downside, with the top cryptocurrency potentially tumbling as low as $24,000.