Investor sentiments are reviving as cryptocurrencies blink green for the second day in a row. The Bitcoin price finally managed to breach resistance at $9,000. At the time of writing, the BTC to USD exchange rate was $9,727.64.
Rewind back two days, and it seemed like Bitcoin prices were stuck in a hamster wheel with no way out. What exactly happened in this short time frame to cause a 180-degree turn in investor emotions?
Well, we got at least two significant reassurances from top government officials in Asia and Europe that the plan to ban cryptocurrencies was out the window.
To begin with, an implicit reaffirmation was sent by the South Korean government that a complete cryptocurrency ban is not currently under consideration.
The Minister of the Office for Government Policy Coordination, Hong Nam-ki, was responding to the petition that landed on the president’s desk last month. The petition signed by over 280,000 South Koreans urged the president to reconsider the government’s stance on imposing a complete ban.
A quick reminder; the idea of the ban was floated by the South Korean Minister of Justice, who’s allegedly blamed to have caused the massive crash in crypto prices in January.
But as obvious from Minister Hong’s statements made on Tuesday, the government is more concerned about curtailing illegal activities and fraudulent trades than outrightly banning this emerging investment class.
Moving on, the second optimistic assurance flowed in from Europe, where President of the European Central Bank (ECB) Mario Draghi said that the bank had no plans to ban cryptocurrencies.
To quote Draghi, “Many of you posted questions about whether the ECB is going to ban Bitcoins or it’s going to regulate Bitcoins. I have to say it’s not the ECB’s responsibility to do that.” (Source: “ECB’s Draghi says not his job to regulate Bitcoin,” Reuters, February 13, 2018.)
Europe and South Korea are huge markets for cryptocurrencies. South Korea, in particular, is one of the largest hubs of crypto trading activity. The fact that government officials in these regions have struck a balance on the issue restores our faith in these investments. And, as obvious from yesterday’s price rally, investors view it no differently than we analysts do.
An uptrend is currently building in Bitcoin prices as the BTC to USD rate makes higher highs and higher lows. If prices continue to ascend at this rate, breach another barrier at $10,000, and stay on track in the following weeks, we may enter another bull market.
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