Bitcoin bounces back as crypto market rallies

Bitcoin has staged a strong rebound on Thursday as the crypto market seemed to recover swiftly from yesterday’s bloodbath.

In late afternoon trading in London, Bitcoin was up 20.8% over the last 24 hours at US$42,101, giving it a market cap of just under US$788bn.

READ: Bitcoin price will hit US$500,000, says Ark Investment’s Cathie Wood

Meanwhile, Ethereum, the market’s second-largest crypto has bounced 21.4% higher to US$2,939, while meme-inspired crypto Dogecoin was up 27.9% at US$0.42.

The recoveries seem to have left crypto sceptics red-faced after many heralded the ‘capitulation’ of the market yesterday as fears over a crackdown on crypto from Chinese regulators and rising concerns about the environmental impact of Bitcoin mining sent prices tumbling.

However, crypto investors came back with a vengeance and a strong motive to ‘buy the dip’, with the value of the entire market up at just over US$1.8 trillion compared to a low of US$1.32 trillion reached on Wednesday afternoon at the peak of the selloff.

Crypto’s resurgence has also been boosted by the interventions from several high-profile investors and crypto backers.

Late on Wednesday, Ark Investment’s Cathie Wood reiterated her prediction that the price of Bitcoin would eventually reach US$500,000 and that the recent plunge in value meant now was “a very good time to buy”.

Meanwhile, Tesla boss Elon Musk also appeared to reiterate his backing for the digital currency amid the market rout, tweeting that Tesla had ‘diamond hands’, a common refrain among online investors referring to holding onto an asset despite declines in value in the expectation that the asset with regain ground and increase at a later date.