Bitcoin surged within minutes to its largest daily gains since July, while other cryptocurrencies followed suit in a sudden upward trend after experiencing the most significant monthly drop since May. Ethereum, Litecoin, and EOS also jumped, and the Bloomberg Galaxy Crypto Index rose by 8.9%. This gains come after Bitcoin dropped by 7.6% in September amid concerns about increasing regulatory pressure in China and the United States. Traders offered various potential reasons for the gains, with some pointing to Federal Reserve Chairman Jerome Powell's statements on Thursday that the central bank has "no intention to ban cryptocurrencies," while others cited price levels such as moving averages closely watched by technical analysts.
In a congressional hearing on Thursday, Powell stated he "has no intention" of banning cryptocurrencies; however, he added that stablecoins might be more subject to regulation. Leah Wald, CEO of cryptocurrency asset manager Valkyrie Investments, expressed, "Markets have been trading under a ban narrative for weeks due to the lack of regulatory clarity and data from U.S. authorities indicating a desire to severely curtail crypto activity." She added, "This, along with weakness in the stock market during what is typically a bullish October for cryptocurrency markets, could indicate a shift in risk-based trading in crypto markets for the coming weeks as investors seek returns from non-traditional assets."
As Bitcoin rose, shares of cryptocurrency exchange companies received a boost, with stocks of Marathon Digital Holdings, Bit Digital, and MicroStrategy increasing by over 5% on Friday, following Bitcoin's rise of over 11%, surpassing the $48,000 level. Meanwhile, both Riot Blockchain Inc. and Coinbase Global saw gains of 1.6%. Additionally, Bitcoin turned its September losses, the largest monthly losses since May, into a 26% profit during the third quarter, compared to a 41% decline in the second quarter. Anthony Trenchev, co-founder and managing partner of the cryptocurrency lending firm Nexo, noted he felt encouraged because this rapid movement brought Bitcoin above its 20, 50, and 200-day moving averages in a swift pass.
