During the first six months of 2018, the cryptocurrency market has trended towards a downward spiral. Previously, we reported that the market had lost over 50% of its overall value and dropped as much as 7% overnight.
Analysts blamed the recent Bitcoin hackings, with the rest of the market following suit. Despite all the issues that have befallen the cryptocurrency market, the last 48 hours have seen a huge increase of almost $40 billion. At the moment, analysts and experts are still trying to figure out why the cryptocurrency market bounced back so quickly.
What Caused a $40 Billion Increase in the Crypto Market?
According to a new report from CCN, the reason for the spike in the market has to do with the daily trading volume improving in most cryptocurrencies. To be more specific, the unforeseen volume rise of Bitcoin and Tether has influenced the market to find new life over the past 48 hours.
As it stands right now, Bitcoin sits above $4.6 billion and Ether's volume is stabilizing at $1.7 billion. Also, Ripple and Bitcoin Cash have doubled since last week. Most importantly, the recent surge in the market will positively impact smaller cryptocurrencies. The volume of those cryptocurrencies and tokens are still quite low, but the recent changes in the market should assist many of those companies to rise in volume over the short-term.
In contrast, we noted how over 1000 ICOs and billions of dollars have been lost to failed crypto projects. However, a lot more traders and investment firms should be willing to get involved in the market during this short-term spike. As a result, big digital assets will continue to rise in value on the current trend but smaller cryptocurrencies have the most to gain from the market's increased performance.
How Long Will the Positive Trend in the Market Last?
It's hard to tell how long the market's recent trend will last. On paper, traders and consumers may feel safer after some of the big changes countries like South Korea and Japan are making to their policies. Meanwhile, the US House of Representatives is locking down on crypto crime. This could help change public perception, and help make more people feel comfortable participating in the market.
Of course, some investors and consumers may look to capitalize on the market's bad streak in order to earn more when it bounces back. Regardless of the reason for the latest surge, analysts are expecting it to continue with the market stability to become clearer over the coming days.