- Bitcoin and other cryptocurrencies gained slightly Monday afternoon as the Dow Jones Industrial Average plummeted more than 1,500 points.
After heavy losses Monday morning, the tide began to turn for cryptocurrencies. Around 3 p.m. ET, when the Dow Jones industrial Average was seeing the worst of its 1,500 point selloff, the total market value of cryptocurrencies started to creep higher. The entire crypto market cap jumped 7% from its low of $US310 billion, to $US335 billion by 4 p.m. ET.
Bitcoin, the largest and most well-known cryptocurrency, was still down 14%, but had climbed 6% off its intraday low of less than $US6,600.
Last year, during cryptocurrencies’ seemingly endless run up, Wall Street began to cautiously embrace bitcoin as a way to find outperformance in a market that was rather boring. Two firms launched futures contracts tied to bitcoin in December, and Goldman Sachs was reported to be working on a cryptocurrency trading desk.
2018, in contrast, hasn’t been the same fairy tale for cryptocurrencies. Since January 1, the total market cap for virtual currencies has fallen by $US245.7 billion, or roughly 43%, thanks to fears of new regulations in Asian markets like China.
Facebook helped to further the selloff on Friday, when the social network announced it would ban all ads for bitcoin, cryptocurrencies, and initial coin offerings (ICOs). At the same time, it was reported that US regulators had subpoenaed cryptocurrency exchange Bitfinex and cryptocurrency company Tether, further driving down prices.
To make things worse for an already volatile market, India’s finance minister Arun Jaitley, also said that the country’s government “does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto assets in financing illegitimate activities or as part of the payment system.”