Bitcoin and its crypto brethren received an unlikely lifeline from American trading regulators on Tuesday this week, which ended in a complete turnaround after a nasty market crash.
The Commodities and Future Trading Commission and the US Securities Exchange Commission held a highly anticipated hearing on Tuesday, focused on their stance towards cryptocurrencies, initial coin offerings and Blockchain technology.
The discourse came at a crucial juncture, as the overall cryptocurrency market endured a spiraling sell off which saw Bitcoin reach lows below $7,000, a figure not seen in over five months.
Industry experts and pundits took to social media platforms, posting updates from the hearing which saw CFTC Chair Christopher Giancarlo and SEC Chair Jay Clayton make some highly influential statements about the current stance towards the overall cryptocurrency and Blockchain space.
With a prevailing sentiment of fear, uncertainty and doubt, a negative stance from the two bodies that hold the future of mainstream cryptocurrency trade could have been as good as a death knell.
But both bodies unveiled balanced and positive sentiments towards cryptocurrencies and Blockchain technology.
Giancarlo delivered an upbeat address saying “if there was no Bitcoin, there would be no distributed ledger technology,” when he was asked about the value of Bitcoin.
He also made it clear in his written testimony that cryptocurrencies are here to say and that regulation needs to nurture the sector while protecting investors.
“Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response. The evolution of these assets, their volatility, and the interest they attract from a rising global millennial population demand serious examination.”
Clayton echoed the sentiments of the CFTC chair, but he also produced a discourse that gave credit to the cryptocurrency industry for adding a new paradigm to the financial system:
“Distributed ledger and other emerging technologies have the potential to further influence and improve the capital markets and the financial services industry.”
Clayton also hammered home the importance of fair regulatory frameworks that will create an environment that benefits all parties involved.
“Said simply, we should embrace the pursuit of technological advancement, as well as new and innovative techniques for capital raising, but not at the expense of the principles undermining our well-founded and proven approach to protecting investors and markets.”
Markets react favorably
The overarching reaction following the hearing has had a positive effect on the cryptocurrency markets.
Bitcoin and Ethereum had seen 20 percent growth in value, according to CoinMarketCap data, at the time of writing, and the rest of the cryptocurrency market was in the green.
This latest development has provided the first bit of positive sentiment in over a fortnight. China has reiterated it’s zero-tolerance of cryptocurrency, India’s regulatory stance has been taken badly, and a number of mainstream banks have ruled out cryptocurrency purchases with credit cards.
These developments culminated in a highly volatile, selling-spree in the cryptocurrency market.
But, with regulatory bodies like the CFTC and SEC promising to foster environments conducive to the growth and development of legitimate cryptocurrencies, fears have been allayed.
What remains to be seen is if this is the start of a fresh wave of positive growth in value for the cryptocurrency space.
The developments have had a number of high profile pundits posting upbeat predictions in response.
Canadian Twitter user Armin van Bitcoin said that the Mayer Multiple is signaling a strong buy signal for Bitcoin:
Smart #bitcoin investors capitulate based on long term trends. The Mayer Multiple is a great example of this, using the 200 DMA to derive its formula. The multiple is currently signalling a $BTC buy. Any questions? 🚀🌖
200 DMA: $6,858
Current Price: $8,425
Mayer Multiple: 1.228 pic.twitter.com/IPRzWiCCuw
— Armin van Bitcoin ⚡ (@ArminVanBitcoin) February 8, 2018
Software engineer Pierre Rochard quoted Xapo CEO Wences Casares in a tweet that emphasized patience in the world of cryptocurrencies.
“If I am impatient – that’s my problem, that’s not Bitcoin’s problem. Bitcoin has all the patience in the world.” – @wences
Extreme ownership. That is leadership. 🤝
Onwards and upwards! Bitcoin’s greatest days are ahead.
— Pierre Rochard (@pierre_rochard) February 8, 2018
Business Insider’s Frank Chaparro shared his story on the Winklevoss twins, who have released bullish sentiments on Bitcoin following the SEC and CFTC hearing this week.
Winklevoss Twins see bitcoin hitting 320,000, saying non-believers will suffer a ‘failure of imagination’https://t.co/PnhvLHEWpX
— Frank Chaparro (@fintechfrank) February 8, 2018