Bitcoin posts biggest increase since July following Fed chair comments

Jerome Powell says he has no intention of banning cryptocurrencies

FILE PHOTO: A Bitcoin sign is seen in a window in Toronto, Canada, May 8, 2014.     To match Special Report BITCOIN-EXCHANGES/RISKS      REUTERS/Mark Blinch/File Photo
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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.

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.

Updated: October 01, 2021, 1:04 PM