Bitcoin posts biggest increase since July following Fed chair comments

Jerome Powell says he has no intention of banning cryptocurrencies

A Bitcoin sign in a window in Toronto, Canada. The largest cryptocurrency gained as much as 10 per cent to $47,884 on Friday. Photo: Reuters

Bitcoin jumped, rising in a matter of minutes to its biggest daily gain since July, and other digital currencies surged in a shock rally that followed the largest monthly decline since May.

The largest cryptocurrency gained as much as 10 per cent to $47,884 early in New York trading.

Ethereum, Litecoin and EOS also jumped, with the Bloomberg Galaxy Crypto Index rising as much as 8.3 per cent. Bitcoin had slumped 7.6 per cent in September amid concern about increasing regulatory pressure in China and the US.

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  Bitcoin slid about 8 per cent to $40,237 in early Asian trading on September 21, 2021, dropping to its lowest level since the beginning of August. Reuters

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  Vitalik Buterin, the co-founder of Ethereum, became the world's youngest crypto billionaire after Ether breached the $3,000 level in May this year. Bloomberg

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  Tether, also known as USTD, is considered a stablecoin as it was designed to always be worth $1. Unsplash

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  Cardano is growing in popularity with cryptocurrency investors after reaching a market cap of $77 billion in May this year. Unsplash

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  Binance Coin is one of the biggest cryptocurrencies in the world. Alamy

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  US technology company Ripple created the XRP cryptocurrency in 2012. Today, it is trading at about $0.94, according to Coinbase. Unsplash

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  Solana, a programmable blockchain cryptocurrency, hit a record $80.12 in August. Bloomberg

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  The USD Coin is a stablecoin with about $27 billion worth of coins in global circulation. Unsplash

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  The Polkadot cryptocurrency is built on a multi-blockchain network and has a market cap of about $28.8 billion. Alamy

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  Originally designed as a meme joke in 2013, Dogecoin today trades for about $0.21 and has a market capitalisation of about $27.6 billion. Getty Images

Traders offered a variety of possible reasons for the gains, while noting the fractionalised market leaves digital assets vulnerable to volatile price swings.

Some pointed to comments on Thursday by Federal Reserve chair Jerome Powell, while others cited price levels closely watched by technical analysts.

“We could be seeing the beginning of some de-correlation with traditional markets here,” said Vijay Ayyar, head of Asia-Pacific with cryptocurrency exchange Luno.

“Early to say though. But that whole narrative that didn’t play out all of last year might just be taking shape. Especially since a lot of the uncertainty with regard to the US debt ceiling and China clampdown. Crypto seems to be in its own bull cycle and continuing higher.”

Mr Powell said in a Congressional hearing on Thursday he had “no intention” on banning cryptocurrencies. He did, however, add that stablecoins might be appropriate for regulation.