Bitcoin and other cryptocurrencies jumped suddenly Friday, a day after Federal Reserve Chairman Jerome Powell said, “U.S. didn’t have plans to ban cryptocurrencies.”
Bitcoin jumped 10.8 % from 5 p.m. ET on Thursday to $48,109.69, its highest level in over a month. Ether, the second-largest cryptocurrency by market capitalization, rose 10.8 % to $3,293.01 during the same time period.
There was no evident cause for the early Friday morning rise in the typically volatile digital currencies. Some traders cited Mr. Powell’s remarks to the House Financial Services Committee on Thursday, as well as the start of the fourth quarter on Friday, when investors sometimes rebalance their portfolios.
Concerns over regulation have kept bitcoin values under control in recent months. Bitcoin fell last week after China’s central bank deemed cryptocurrency transactions unlawful, confirming the country’s stance against digital alternatives to government-issued money.
During a hearing before the House Financial Services Committee, Mr. Powell was asked if he planned to ban or restrict the use of cryptocurrencies in the same way that China does.
He said there was “no intention to ban them,” but added that stablecoins, which are cryptocurrencies whose value is tied to government-issued currencies such as the 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 did not imply any evident movement in policy, cryptotraders praised the Fed chairman’s stance.
“Of course, that was a very favourable message, especially when compared to the People’s Bank of China,” said Naeem Aslam, chief market analyst at brokerage AvaTrade.