- Cryptocurrencies recovered from Friday’s slump with decentralized exchange tokens sushi and uniswap in the lead Monday.
- Ether rose as much as 9%, while DEX coins uniswap and sushi were up as much as 37% and 29%, respectively.
- China’s previous crackdowns “had already been built into prices” Jeffrey Halley from OANDA said.
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The cryptocurrency market surged in value on Monday, recovering from Friday’s slump that was triggered by China’s ban on trading and mining, while decentralized exchange tokens sushi and uniswap were the main beneficiaries of the bounce-back.
Last week, China banned all trading and mining activity, as well as forbidding foreign exchanges from doing business with users on the mainland, triggering a sell-off that wiped as much as $US200 ($AU275) billion off the value of the total crypto market in a single day at one point.
But by Monday, bitcoin, ether and a host of smaller coins were on the way to recovering much of those losses, with DEX coins ripping higher.
Uniswap – the largest DEX token by market value – was up 37% earlier in the day, but pared some of those gains to stand around $US24.69 ($AU34) up 12%, by 06:11 a.m. ET, while smaller rival sushi rose as much as 29%, but was last up 5% to $US11.00 ($AU15), according to Binance data. DEX coins are native to decentralized platforms that allow their users to trade without any kind of intermediary, such a broker, bank, or clearing house.
“Ether, uniswap and sushiswap have all surged over the past 24 hours due to the China ban creating a narrative that Chinese citizens will flock to DeFi solutions,” Marcus Sotiriou, sales trader at digital asset broker GlobalBlock told Insider.
Uniswap and Sushiswap are two of the largest decentralized exchanges, so it was little surprise that their native tokens were ahead of the pack, he added.
“It may well be that China’s previously announced crackdowns had already been built into prices, meaning the knee jerk reaction quickly ran out of steam,” Jeffrey Halley, Senior Market Analyst from OANDA, a foreign exchange company, said in a note to clients Monday.
“Over the weekend sessions, bitcoin has shown some resilience and has now recovered the majority of those losses,” Halley said.
China has waged a years-long campaign against virtual currencies dating back to 2013, when it banned banks from handling bitcoin transactions. In 2017, it also ordered local cryptocurrency exchanges to cease operations, forcing people in China to use off-shore exchanges. Earlier this year, Beijing cracked down on financial institutions from offering crypto services as well as bitcoin mining.
Now China is going even further, targeting individuals, not just businesses, and closing off ways to get around earlier limits, although Friday’s ban stopped short of banning possession of cryptocurrencies.
Elsewhere across the market, ether, the second-largest cryptocurrency after bitcoin, was last up around 5% at $US3,109.29 ($AU4,282) on the Kraken exchange, making it one of the stronger performers among the larger tokens, while bitcoin was up 1.4% around $US43,869 ($AU60,413), according to CoinMarketCap.
GlobalBlocks’ Sotiriou noted that most decentralized finance applications – including some exchanges – are built on the ethereum network, which would account for ether’s outperformance on Monday.