What happened 

The cryptocurrency market sprung to life suddenly late on Thursday night and hasn't lost much momentum in Friday's trading. Values are up double digits almost across the board with some cryptocurrencies that dropped big this week recovering a large chunk of their losses. 

As of 2 p.m. ET, in the past 24 hours, Dogecoin (DOGE 10.94%) was up as much as 14.2%, Shiba Inu (SHIB 10.99%) jumped 28.3%, BNB (BNB -2.02%) increased 15.5%, and Chainlink (LINK -0.01%) gained 16%. 

Digital image of digital assets.

Image source: Getty Images.

So what 

The macro perspective is really what's driving the market here. This week we saw the collapse of Terra (LUNA) (LUNC 1.36%) and its stablecoin, TerraUSD (USTC -5.76%), which sent shockwaves through the crypto market. Panic ensued as people sold other assets or were liquidated out of positions as markets dropped. 

It's a reminder that a lot of the crypto gains of the past two years have been from trading and leveraged trading at that. And without fundamentals to fall back on, traders can be scratching their heads at where the bottom is as prices fall. 

Money started pouring back into the market last night and seems to be continuing today. It's possible that LUNA's collapse is a one-time event in cryptocurrency and the rest of the industry will move on. But it's also possible that some people who lost money in LUNA's collapse and the drop in cryptocurrencies, in general, will abandon their bullish position for the foreseeable future. 

Now what 

I see this as a maturing time for the crypto industry. It's likely that not all cryptocurrencies will survive the next decade, which is easy to say, but difficult to see happen in the real world, which we saw this week. 

But as weak or unstable tokens fall, we will see others get stronger, attract developers, and be core to users' digital lives. Ultimately, the blockchain is the disruptive element in cryptocurrencies, so whichever blockchain attracts the most developers and users will ultimately win. 

With that said, I still think there are significant risks for cryptocurrencies like Dogecoin and Shiba Inu, which are ultimately meme coins. If the buyers who pushed those tokens higher abandon their positions, then the value could drop rapidly. And that's ultimately the biggest risk for their valuation. 

Investors should keep in mind the risks associated with any token and understand that risks can quickly become reality. While I think the crypto industry will come out of the current downturn strong, I don't know when or where the bottom is or which token will collapse next. But it's likely we see more pain before there's a true recovery.