Bitcoin prices recovered above $8,500 Monday as global regulators took a tempered approach to cryptocurrency regulation ahead of the G-20 meeting Tuesday.
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The Financial Stability Board, a global watchdog that runs financial regulation for G-20 economies, took a cautious tone in a letter to members Sunday, responding to calls from some countries to crack down on digital currencies.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time,” said Mark Carney, the chair of the Financial Stability Board, in the letter.
Carney, who is also Governor of the Bank of England, pointed to the relative size of cryptocurrencies and said that “even at their recent peak, their combined global market value was less than 1 percent of global GDP.”
Bitcoin hit a high of $8,702.47 as of 4:20 p.m. ET Monday, more than $1,200 higher than where the cryptocurrency was trading a day earlier, according to CoinDesk.
U.S. Treasury Secretary Steven Mnuchin and other leaders have indicated they plan to tackle the subject of cryptocurrency regulation during the summit in Buenos Aires, Argentina, that began Monday. Cryptocurrency discussions will happen in a closed door session on Tuesday, a spokesperson from the G-20 told CNBC, and may be discussed at a subsequent press conference.
While the FSB’s announcement didn’t take cryptocurrency regulation off of the table , it did support prices Monday, said Bart Stephens, co-founder and managing partner at Blockchain Capital.
“The G-20 news over the weekend helped crypto prices. Or at least, the G-20 news could have been a lot worse,” Stephens said.
Low liquidity and recent news events have exacerbated prices, according to Joe Van Hecke, founder and managing partner at Grace Hall Companies.
“There were some positive comments from the Financial Stability Board today that created some much needed bullish news for bitcoin and cryptocurrencies in general,” Van Hecke said. “The space has been hammered over the past few months with a spate of bad press.”
The digital currency had plunged near the $7,000 level, then jumped $700 in less than three hours over the weekend following news that Twitter will reportedly ban advertising for initial coin offerings, token sales, and cryptocurrency wallets globally.
Bitcoin’s wild weekend
A ban from Twitter would follow Google and Facebook’s restrictions on advertising and efforts to crack down on cryptocurrency frauds.
Google announced an update to its policy last week that will restrict crypto advertising as of June. Facebook said in January it would ban all ads that promote cryptocurrencies to prevent the spread of what it called “financial products and services frequently associated with misleading or deceptive promotional practices.”
“The Twitter, Google and Facebook news isn’t much of a market mover in our opinion,” Blockchain Capital’s Stephens said.
Others said the price moves are more technical. Jack Tatar, co-author of “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond,” sees a support level around $8,000.
“You need more sellers than buyers for the freefall to continue and despite much of the bad news, supporters of the crypto asset aren’t heading for the doors,” Tatar said. “The news about bitcoin’s death have been greatly exaggerated.”
Bitcoin began its fall from $11,000 two weeks ago following a statement by the SEC that platforms trading digital assets need to register with the agency. News of compromised accounts on a major Hong Kong-based exchange Binance also contributed to that day’s drop below $10,000.
Prices briefly dropped by roughly $200 Monday following a White House announcement that President Donald Trump issued an executive order banning any transactions within the United States involving Venezuelan digital currency.
President Trump’s order is in response to recent attempts by Venezuelan President Nicolas Maduro’s regime to “circumvent U.S. sanctions by issuing a digital currency,” the White House said in a statement.