The chairman of the Commodity Future Trading Commission (CFTC) and the chairman of the SEC gave testimony on Tuesday, relieving fears on cryptocurrencies. Investors remained timid on cryptocurrencies in recent weeks, as governments began to crackdown on digital currencies. Bitcoin was targeted by credit card companies after major banks started blocking purchases of the currency.
Christopher Giancarlo and Jay Clayton, chairman of the CFTC and SEC respectively, helped the market rally after seeing Bitcoin fall to below the $6,000 mark a day prior.
“We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balance response, and not a dismissive one,” states Giancarlo.
The statement led to a Wednesday rally with 24-hour price changes in the double digits for all major currencies. For the 24-hour period between Tuesday 1 pm ET and Wednesday 1 pm ET, Bitcoin rose 20.33% to trade at $8,344, NEO rose 31.50% to $115.11, Ethereum rose 17.96% to $840.99.
Ripple gained 14.06%, Bitcoin Cash rose 18.27%, Litecoin rose 21.11% and NEM rose 21.16%.
The firm confirmed, via a tweet, that Citi, Capital One, Bank of America and Chase have all blocked purchasing cryptocurrencies on the platform. Debit card and bank transfers are available. The major banks took precautions against digital currencies on the gears that a price drop will cause consumers to accrue high debts.
Blockchain was also a topic of Giancarlo’s speech, when the chairman stated, “It’s important to remember that if there were no Bitcoin, there would be no distributed ledger technology.” Giancarlo has been an advocate of distributed ledger technology, which he claims made it easier to determine who owned mortgages during the recession.
“I hope people pursue it vigorously,” adds Clayton.
Regulators also discussed their opinions on cryptocurrencies during the hearing. Regulators claimed that there are many problems with digital currencies. The group added that governments need to coordinate their responses to help protect investors.
Ripple announced that the cryptocurrency’s blockchain network has added a China-based payment provider. LianLian Pay will embrace the cryptocurrency through RippleNet. The company will offer RippleNet customers instant payments via blockchain across the 19 currencies that the payment provider supports.
Goldman Sachs added to digital currency fears following Wednesday’s rally. The company claims that the downturn of digital currencies could get even worse. Goldman claims that many cryptocurrencies will not survive over the long-term.
Reports warn investors that the currencies that don’t survive will trade at zero, leading investors to lose their entire investment.
The comments come after a year where Bitcoin ended near $20,000 highs and has since lost over $14,000 in value to trade at below $6,000 yesterday. The volatility of the currency has many investors holding on to their Bitcoins in hopes that the currency will rebound.
Others are more optimistic than Goldman, with some investors suggesting that Bitcoin’s prices could well to $50,000 by the end of 2018.