The price of the world’s most popular cryptocurrency Bitcoin is recovering after a massive drop last week.
On Friday, the digital currency plunged to as low as $2,951.15. The value hasn’t been so low since August. Last week, Bitcoin’s value dropped 14.7%.
However, the price has since recovered by 34%. At press time, Bitcoin is trading at $3,995.89, which is still short of its recent All-Time High at the beginning of this month. On September 1st, for the first time in history, Bitcoin price has surged past $5,000.
The recent decline in price has been triggered by several factors. Major chinese cryptocurrency exchanges have announced their plans to close by the end of September as China cracked down on digital currencies together with an ICO ban. Using initial coin offerings to raise funds is now considered illegal in China.
JPMorgan CEO Jamie Dimon also contributed to the latest price drop. Last week, he criticized Bitcoin and called it a fraud worse than the tulip bulb mania of the 17th century. Dimon also threatened to fire his workers if they invest in cryptocurrency.
However, investors are starting to get over the initial shock caused by the chinese cryptocurrency drama. The Bitcoin market is recovering as the players realize that China no longer dominates it.
Aurelien Menant, founder and CEO of Hong Kong-based exchange Gatecoin believes that the market is starting to understand that the issues in China no longer matter because the local exchanges stopped dominating trading activity. The next bull cycle will be boosted by institutional investors in Europe, Japan and Korea.
It’s also important to understand that the crackdown in China was targeting only the local exchange platforms that wouldn’t comply with the regulatory environment. It was not a crackdown on Bitcoin and blockchain technology as a whole.
Despite the recent decline, Bitcoin is having quite a remarkable year. The price of the digital currency is still up 293% since the beginning of this year.
It is still unknown whether the the decision made by Chinese regulators is going to lead to a full and permanent ban of Bitcoin in China.
Earlier this year, Chinese exchanges were dealing with a similar situation, facing regulatory implementation. However, Japan picked up the slack, after cryptocurrency has been legalized in the country.
As of today, it is obvious than the markets have shrugged off China exchange news and are ready to move forward.