Crypto market tops $2 trillion for the first time since May

Nadine Chakar, State Street Digital executive vice president, joins ‘Squawk on the Street’ to discuss the state of the crypto market as it rallies higher. Subscribe to CNBC PRO for access to investor and analyst insights on crypto and more: https://cnb.cx/2BT2E7y

Bitcoin topped $48,000 over the weekend, its highest level since May, but pared some of those gains on Monday.

On Saturday, the digital coin hit $48,126.47, its highest level since May 17, according to Coindesk data. It last traded $46,351.55, according to Coin Metrics.

The bitcoin recovery comes after it sold off heavily in June and July, dropping below $30,000 following a record high of over $64,000 in April.

“I do believe this (bitcoin’s rise) is the result of massive accumulation” when bitcoin was trading around $29,000 to $30,000, according to Vijay Ayyar, head of business development at cryptocurrency exchange Luno.

Bitcoin’s rise lifted the value of the entire cryptocurrency market above $2 trillion on Saturday for the first time since mid-May, according to data from CoinMarketCap, which tracks the prices of digital coins.

The crypto market has faced a number of headwinds over the summer. One of the biggest was the renewed regulatory scrutiny on the industry from authorities in China which has forced bitcoin mining operations to shut down and move elsewhere. That was one of the biggest reasons for bitcoin dropping below the $30,000 level.

Meanwhile, the U.S. Senate passed a massive infrastructure bill last week without any of the proposed amendments on crypto tax reporting that had delayed its passage. That was seen as a blow for the crypto community, but some said it showed the U.S. government was taking the industry seriously.

These “fundamental regulatory roadblocks” have “clipped the market’s wings” in the near term, said Jehan Chu, founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital.

Chu said that while bitcoin may climb to $55,000, investors should expect a “significant pullback to sub-$30,000 levels, resetting the stage for a long steady march” to $100,000 in 2023.

More negative news came this month after hackers stole $600 million in one of the biggest cryptocurrency heists in history. But in a bizarre turn of the events, the hackers eventually returned nearly all of the stolen money.

This didn’t seem to faze the bitcoin bulls.

Luno’s Ayyar said bitcoin is approaching resistance levels between $48,000 and $50,000.

“I wouldn’t expect bitcoin to run through in one shot,” Ayyar said, adding that if it does break that level of resistance, then the digital coin is “definitely looking to go back to all-time highs.”

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Crypto market tops $2 trillion for the first time since May

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