Bitcoins Star Backers, Dip Buyers Help Cryptos Recover

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Bitcoin regained some lost ground to trade near 40,000 on Thursday, a day after a brutal selloff on concerns over tighter regulation in China and unease over the extent of leveraged positions in the cryptocurrency world.

The biggest and most popular cryptocurrency rose 10 to a touch above 40,000, after plunging 14 on Wednesday to its lowest since late January. Smaller rival ether was up 12 at 2,744 at 1200 GMT, after its 28 tumble.

Those bounces came after prominent crypto backers such Ark Invests Cathie Wood and carmaker Teslas Elon Musk indicated their support on Wednesday.

Wood said in an interview with Bloomberg that she was still sticking to her 500,000 forecast. Musk reiterated that Tesla was holding on to its bitcoin investments.

People consider this as a buy the dip moment, and many consider this as the last chance to buy bitcoin cheap, said Ruud Feltkamp, chief executive at crypto trading bot Cryptohopper. The next few months will show if the bull market will continue or if its the start of the end of its run.

Wednesdays declines in both digital assets were one of their biggest daily percentage moves in more than a year, with investors rushing to exit trades that until recently were outperforming traditional markets such as stocks and bonds.

The catalyst was a statement by Chinese financial industry bodies banning the use of cryptocurrencies in payment and settlement, and prohibiting institutions from providing cryptorelated products or exchange services…

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