A sudden surge in bitcoin and other cryptocurrencies came a day after Federal Reserve Chairman Jerome Powell said there were no plans to ban cryptocurrencies in the US.
Bitcoin rose 10.8% to $48,109.69 from its price on Thursday at 5 p.m. ET, its highest level in nearly a month. Ether, the second-largest cryptocurrency by market cap, also gained 10.8% to $3,293.01 over the same period.
There was no clear catalyst for the upward move in the notoriously volatile digital currencies that took place on Friday morning. Some traders pointed to Mr. Powell’s comments on Thursday to the House Financial Services Committee and Friday at the start of the fourth quarter, when investors sometimes reset their portfolios.
Concerns over regulation have kept a lid on cryptocurrency prices in recent months. Bitcoin strengthens the country’s tough stance against digital rivals for government-issued money after China’s central bank declared cryptocurrency-related transactions illegal last week.
During questioning before the House Financial Services Committee, Mr. Powell was asked whether he had any intention to ban or limit the use of cryptocurrencies similar to China.
He added that “there was no intention to ban them,” but added that stablecoins, which are cryptocurrencies whose value is pegged to government-issued currencies such as the dollar, “are like money-market funds, they Banks are like deposits, but they are somewhat outside the regulatory ambit and it is appropriate that they be regulated.”
Although the comments did not indicate any clear change in policy, crypto traders welcomed the Fed chairman’s posture.
“It was definitely a very favorable note, especially when you compare it to the People’s Bank of China,” said Naeem Aslam, chief market analyst at brokerage AvaTrade.
The surge in cryptocurrency boosted shares of digital exchange Coinbase Global Inc, which was up over 3% in premarket trading.
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