The past week has been a prime illustration of the way in which the cryptocurrency can move up and down both very quickly and by large margins. Last weekend, nearly all of the top digital currencies fell precipitously in value, some declining by as much as 50% in price over a span of just 24 to 48 hours. According to Coin Desk, the industry fell by about 25% overall during that time, and the fall started just after digital currencies had reached an all-time high. The quick sell-off had some analysts wondering if this was the beginning of a crash. And yet, just a few days later, the industry has regained much of that lost ground, growing by about $150 billion to reclaim some of the value which was lost.

17% Regained by Wednesday

After the drop of about 25%, the industry had already climbed back up 17% or so by the start of trading on Wednesday. The overall value of all publicly traded cryptocurrencies was rising once again. Tuesday's low of $134 billion for the industry had climbed to about $157 billion, marking a gain of about $20 billion in the span of just a day. Leading the gains were a group of the top 10 leading digital currencies by market cap, all of which sported double-digit gains for that same 24-hour period. Litecoin, iota, and monero saw the biggest increases during that time.

Broader Implications

What should investors in the cryptocurrency world take away from the dramatic fluctuations of the past week? First, it's important to keep in mind that volatility is the name of the game for cryptocurrencies. Historically, each time bitcoin has reached an all-time high price point, it has then followed that record with a slump in value. Just before the drop last weekend, bitcoin climbed to nearly $5,000 per coin, its highest level ever.

In this particular case, the dip in the industry may have been prompted by external factors, including China's recent decision to ban all initial coin offerings (ICOs), which could have a major impact on the broader industry. Even the top cryptocurrencies like bitcoin and ether declined by wide margins on this news, while gold made simultaneous gains. Hoever, the initial drop was not the collapse of the market that skeptics feared, and in fact the industry regained most of its losses within a day or two.

A similar increase took place in the market for cryptocurrency assets, which grew to a size of $8.5 billion after dipping to about $7 billion alongside the price of the currencies themselves, according to CoinMarketCap. In spite of the news from China, some of the major players in the ICO token scene also recovered lost investments during the same period. OmiseGo, for example, rebounded above $1 billion after it had initially dropped to $718 million following China's announcement.