Bitcoin Bounces at $55K as Solana, SHIB Lead Crypto Market Recovery

The cryptocurrency market has bounced back after yesterday’s sell-off—with altcoins Shiba Inu and Solana leading the recovery. 

Markets on Thursday were hit hard after already suffering a rough week. Bitcoin, the largest cryptocurrency by market cap, hit its lowest price in a month. The sell-off came after the crypto asset hit an all-time high of $69,044 on November 10. 

The rest of the crypto market followed—as it usually does—and shed $150 billion in five days. 

But today, things are looking better. Bitcoin initially sank further and hit a low of around $55,000 before bouncing to a daily high of $58,460, per data from CoinGecko.

Still, that's only a 0.3% gain for Bitcoin on the day, though other crypto assets are today doing much better. All in all, the crypto market has gained nearly 5% today and currently stands at a collective $2.7 trillion market cap.

Shiba Inu—or SHIB—is today's shining star: it’s up 19.4% in the past 24 hours, trading at $0.00005124. Shiba Inu is the eleventh largest digital asset by market cap—and one of the most talked about at the moment due to its impressive gains: it runs on the Ethereum network and is based on an internet meme. 

Despite having no real utility, it has a market cap of over $27 billion.

Solana, the fifth biggest digital asset which does have utility, is up nearly 10% in the past 24 hours—at $214.92 a coin. The cryptocurrency is an Ethereum competitor and it’s used to pay for transactions on what’s quickly become the second-largest network for DeFi and NFT trading activity. 

DeFi, shorthand for “decentralized finance,” describes a group of products and services that allow users to trade, borrow, and lend crypto assets without third-party intermediaries. There is now more than $13 billion locked up in Solana DeFi protocols, per data from DeFi Llama. As a result, Solana has soared in value in the past year: it’s up over 10,000% since November 2020. 

Ethereum, the second biggest cryptocurrency, is up 4.3% in 24 hours, trading at $4,242, while Binance Coin, the native token for the world’s biggest crypto exchange, is up 6.2%—trading for $578.90.

It’s possible that markets have suffered this week, in part, because U.S. President Joe Biden signed a $1.2 trillion infrastructure bill on Monday. The bill included new tax reporting requirements for certain crypto users that are now defined as “brokers” by the new law. The new definition, if cast broadly, will mean that cryptocurrency miners, software developers, and stakers could be subject to “impossible” requirements and a “cumbersome surveillance system,” according to crypto advocacy and civil liberties groups.

Crypto investors may have been relieved to learn this week, however, that these new requirements would not go into effect until January 1, 2024. What’s more, several members of Congress are currently working to amend or repeal the crypto tax provisions in the law.