After a six week low, Bitcoin begins to soar with a 7% spike in an overnight sensation. The plummeting in Cryptocurrency prices over the weekend did not just affect Bitcoin but other Cryptocurrencies as well, with major crypto prices dipping to figures below $7,300. Bitcoin itself slipped below $7,600 after closing at $8,585 on Friday.
The spike in the wee hours of Monday to figures above $8,000 is a reprieve from a frustrating weekend. The rise is the beginning of what promises to be a better week for crypto traders.
Lessons From The Weekend, What Caused?
Before we get into what may have attributed the spike, some lessons from the weekend could come in handy. One most common is the banning of crypto ads by Google and Facebook, which accelerated the sliding of Bitcoin prices. It did not just affect Bitcoin but also other cryptos as well. Ethereum, for example, must have been hit harder by the recent bans because it is mostly used by the ICO pre-sales.
In addition to this, there were fears on what could happen in the G20 summit this week (19th -20th), which has crypto on its main agendas.
What Has Changed?
Now, coming into the week, we are witnessing a turnaround of the weekend’s events. A rise in bitcoin prices was unexpected, considering the frustrations experienced over the weekend. So what changed?
Well, several factors contribute. The one that makes sense most is a development leading to the upcoming G20 summit in Buenos Aires. Previously, there were worries that the summit would pedal regulations and strict policies, this led to a fall in prices. Conversely, a letter from Mark Carney, (Financial Stability Board FSB chair) to the G20 central bank governors and finance ministers reveals otherwise.
FSB Press Release
In the press release that stated the priorities of the summit, as per the contents of the press release, crypto assets do not at the moment pose a major risk to global financial stability. Why? Because they are not being used widely and are not unified to the cores of a regulated financial system. The letter, however, notes that the market was rapidly evolving.
The letter further warned that if usage was widely expanded with increased interconnection without improvement in conduct, cyber resilience, and market integrity, the market would pose a risk to financial stability and the assessment could change
When it came to other issues concerning investor and consumer protection, Mark Carney notes that, though Cryptocurrency could be a hub for money launderers and terrorist financiers, the technology has an overwhelming potential to improve the inclusiveness and efficiency of financial systems and the economy.
The aforementioned could be the most sensible reason for the overnight escalation of bitcoin prices. Considering fears instilled by analysts during the weekend regarding the anticipation of Cryptocurrency crackdown and stricter regulations by major economies with harsh policies, the news is a positive surprise.
The G20 meeting alone cannot be solely acclaimed for the drop and upsurge of the crypto market during the weekend. Other factors did come to play. Fact is, the market needed optimism for an upward trend after being in nosedive for over a week.
The development consequently led to a recovery of Cryptocurrency valuation to beyond $310 billion, an upward from the subsequent fall to $280 billion.