Bitcoin Rebounds on High Note after Miserable Week

Martin Green

Monday, March 19, 2018 6:59 PM UTC

Monday, Mar. 19, 2018 6:59 PM UTC

Bitcoin endured a beating throughout the week, dropping to a monthly low of $7,300 at the weekend, before posting gains Monday.

Bitcoin ended a bad week on a high note Monday by posting gains of more than $1,000 after a positive verdict from the Financial Stability Board. The cryptocurrency had dropped to a monthly low of $7,300 at the weekend. Rival coins such as Ethereum also suffered painful declines as investors sold off their assets amid panic over a poor 50-day moving average performance.

However, the FSB provided a welcome tonic and restored some confidence to the market with a statement that came just in time to counter the steep declines.

FSB head Mark Carney, who is also governor of the Bank of England, sent a letter to G20 finance ministers and central bank governors, who are meeting Tuesday in Buenos Aires, Argentina. In it, he wrote: “Responding to the concerns of members, the FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system.”

Analysts said Carney’s comments show that Bitcoin is not a threat, but something to nurture, which was enough to drive confidence back into the market. Bitcoin’s value surged above $8,500 on Monday, but investors and sports bettors who take advantage of its speed, anonymity and ease of use have been warned to expect further volatility in the week ahead.

“While the FSB’s statement may temporarily temper the otherwise increasingly hostile regulatory climate for cryptocurrencies, what transpires as world leaders meet at the G20 summit this week remains to be seen,” Blockchain investor Oliver Isaacs said. Investor Marius Rupsys added: “I view this event very positively; crypto assets being discussed by (the) largest countries shows it has reached important milestone to be considered big enough to be discussed on a global level.”

The G20 summit could be a turning point for Bitcoin and other cryptocurrency markets as investors plead for a coordinated, global approach to govern this digital asset market.

“G20 representatives must use this summit to work toward an agreement to adopt common regulations for cryptocurrencies,” said Nigel Green, chief executive of deVere Group. “By doing so, they will position their respective countries on the right side of history.”

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Twitter Follows Facebook and Google, Will Ban Cryptocurrency Advertisement Ban in Two Weeks

— Bitcoin Austria (@Bitcoin_Austria) March 19, 2018

But further negative stories emerged to counteract the positivity surrounding the FSB note. This week we learned that Google and Twitter are preparing to follow in the footsteps of Facebook by prohibiting cryptocurrency adverts. These tech giants have restricted financial advertising amid concerns over illicit activities. The news follows a story detailing how fake Elon Musk accounts have stolen thousands of dollars from Twitter users. Vitalik Buterin, founder of Ethereum, has also been impersonated by scam artists. It highlights the wild West nature of cryptocurrencies that are new and difficult to police.

“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time," Buterin said. "Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”

A year ago, an Ether coin was worth $13 and it is now trading at around $540. This year it has gone as high as $1,400, but it is currently at a low point. Bitcoin has endured similar swings in fortunes, and Morgan Stanley claims it is echoing the build-up to the dotcom crash, just 15 times faster, so investors are urged to tread carefully when buying up cryptocurrencies.

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