Bitcoin above US$8,000 after regulators spare toughest reprisals

A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. — Reuters pic
A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. — Reuters pic

NEW YORK, Feb 8 — Bitcoin is marching toward its second day of gains as traders showed relief over comments Tuesday by US securities regulators, who called for greater oversight of cryptocurrencies without proposing industry-killing measures.

The largest digital token headed to its first back-to-back increase in almost two weeks, adding 4.6 per cent to US$8,121 (RM31,757) by 12.13pm in New York, after earlier rising above US$8,600 for the first time this week, according to prices compiled by Bloomberg. Rival coins Ripple, Ethereum and Litecoin held single-digit gains, even after a Goldman Sachs Group Inc report said most virtual currencies won’t survive a coming shake-out.

Bitcoin’s more than 40 per cent surge from its low point yesterday was “partly due to US regulators’ comments that they’re planning a ‘do no harm’ approach” in any new rules, said Daire Ferguson, chief executive officer of Irish online currency platform AvaTrade.

The heads of the US Commodity Futures Trading Commission and the Securities and Exchange Commission said lawmakers may need to pass legislation that gives federal agencies jurisdiction over Bitcoin’s spot market and associated online trading platforms.

“The market was certainly worried that they might come out harsher,” said Mati Greenspan, market analyst at currency trader eToro in Tel Aviv. “In fact, they were quite soft, which is mostly in line with all of their previous messages.”

The biggest tokens were holding most of their Tuesday gains. Over the past 24 hours, the top 10 by market value had an average increase of about 11 per cent, according to prices.

The respite this week didn’t temper Bitcoin’s volatility, a frequent target of regulators and central bankers who say no asset as mercurial as crypto can become a currency.

Volatility was among a list of investor risks in the world of crypto coins and their initial offerings that was laid out yesterday by SEC Chairman Jay Clayton before a Senate commmittee. He included “poor, incorrect or non-existent disclosure” as well as manipulation, fraud and theft.

Digital currency advocate Tyler Winklevoss, who said he’s an investor in Bitcoin, Ethereum and a few others, welcomed the imposition of regulations, in an interview with Bloomberg in Abu Dhabi.

“Our whole thesis is that these technologies can’t flourish and grow without thoughtful regulations connecting them to traditional finance,” Winklevoss said. — Bloomberg

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