Cryptos rally after leaked US Treasury statement calms crackdown fears

Bitcoin led a rally in cryptocurrencies on Wednesday after what appeared to be a prematurely published US Treasury statement allayed market worries about a sudden tightening of US rules around digital assets.

In a statement that briefly appeared on the Treasury website before it was taken down, Treasury Secretary Janet Yellen said a still-pending executive order on virtual currencies from President Joe Biden “calls for a coordinated and comprehensive approach to digital asset policy [that] will support responsible innovation”.

CoinDesk published an archived version of the release.

The US Treasury Department did not immediately respond to Reuters’ emailed request for comment about the statement.

Biden is expected to sign a long-awaited executive order on Wednesday directing the Justice Department, Treasury, and other agencies to study the legal and economic ramifications of creating a US central bank digital currency.

The White House last year said it was considering a wide-ranging oversight of the cryptocurrency market – including an executive order – to deal with the growing threat of ransomware and other cybercrime.

‘A constructive approach’ to crypto

The accidentally published remarks indicate Biden’s impending crypto order “would take a constructive approach in regulating the digital asset industry,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

“A constructive approach from the US would be a big step for the digital assets, as regulation is one of the major risks to their valuation”.

Bitcoin rose 8.9 per cent to $42,188 (€38,427), on track for its biggest gain since February 28, while smaller peer ether, the coin linked to the Ethereum blockchain network, added 7 per cent to $2,759 (€2,513), also set for its best day this month.

US exchange-traded funds (ETFs) tracking bitcoin futures that gained regulatory approval late last year also jumped in premarket trading. ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF surged about 9.5 per cent each.

US crypto miners that act as a proxy for moves in digital coins also advanced. Riot Blockchain jumped 9 per cent and Marathon Digital Holdings 7.5 per cent, while crypto exchange Coinbase Global Inc added 7 per cent.

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