New York, NY, United States, 10/08/2021 / Top Wire News /
The price of Bitcoin and several other cryptocurrencies suddenly jumped on Friday after Jerome Powell, Chairman of the Federal Reserve said that the US has no plans to ban cryptocurrencies.
Wall Street Journal reported that Bitcoin rose 10.8% from its 5 p.m. ET value on Thursday to $48,109.69, its highest level in a month. Ether, the second-largest cryptocurrency also gained equally to close at $3,293.01 or a rise of 10.8%.
Although there was no obvious catalyst for this jump in prices, some traders pointed to Mr. Powell’s comments to the House Financial Services Committee on Thursday and to the start of the fourth quarter on Friday when some investors reset their portfolios.
Worries over tighter regulation have prevented cryptocurrency prices from moving upwards in recent months. A notable example is the price slide in Bitcoin last week after China’s central bank declared cryptocurrency transactions illegal, thus reinforcing the government’s tough stance against digital currencies that compete with government-issued money.
Mr. Powell was asked during questioning before the House Financial Services Committee whether he had any intention to ban or limit the use of cryptocurrencies. He said that “there is no intention to ban them”, but added that stablecoins, cryptocurrencies whose value is tied to government-issued currencies such as US dollar, “are like money-market funds, they’re like bank deposits, but they’re to some extent outside the regulatory perimeter and it’s appropriate that they be regulated.”
While the comments didn’t signal any shift in policy, cryptotraders welcomed this posture of the Federal Reserve Chairman. Naeem Aslam, chief market analyst at brokerage AvaTrade said “That was, of course, a very favorable note especially when you compare it to the People’s Bank of China,”
The surge in cryptocurrencies also boosted the shares of digital exchange Coinbase Global Inc. whose shares were up 3% in the premarket trading.