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Bitcoin climbs as US says it won't ban cryptos like China

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·2-min read
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Crypto-related products are continuing to see strong demand. Photo: Reuters
Crypto-related products are continuing to see strong demand. Photo: Reuters

Bitcoin's price was up on Wednesday, hovering above $50,000 (£36,851), as cryptocurrencies recover losses incurred in the third quarter.

The surge follows the Securities and Exchange Commission chair Gary Gensler saying that the US won’t follow China’s lead in banning digital tokens.

“Our approach is really quite different,” Bloomberg reported Gensler as saying.

Bitcoin (BTC-USD) was up 2% to trade at $50,680. Ethereum (ETH-USD), however, was down 0.7% to trade at $3,375. 

Bitcoin was up Wednesday morning. Chart: Yahoo Finance UK
Bitcoin was up Wednesday morning. Chart: Yahoo Finance UK

Meme token Shiba Inu (SHIB-USD) has been soaring ever since Tesla (TSLA) CEO Elon Musk tweeted a picture of his dog, which is the same breed the token is named after. On Wednesday morning it was up 64%.

Meanwhile bitcoin is up nearly 76% over the last 12 months, and has risen about 17% this month.

It had earlier fallen in part because China’s central bank vowed to crack down on illegal activities of cryptocurrency trading and banned overseas exchanges from providing services to mainland investors.

But Gensler’s comments will likely assure investors — something that also happened when US Federal Reserve chairman Jerome Powell said the US has "no intention” of barring cryptocurrencies.

Watch: What are the risks of investing in cryptocurrency?

“Powell’s statement caused a spur of optimism among investors,” said Naeem Aslam, chief market analyst at AvaTrade.

“Investors should expect the rally to continue as long as there isn’t a big correction in equity markets, which could potentially have a spillover effect on crypto markets as well," he said.

He added that investors should keep in mind that cryptocurrencies and crypto-related products are continuing to see strong demand.

Read more: European markets tumble on inflation fears and soaring oil and gas prices

Most recently, US Bank has entered the playing field, offering crypto custody services for bitcoin. It will also evaluate if it is feasible for the bank to provide custody services for other digital coins going forward.

Meanwhile, the IOSCO group of securities regulators and the Bank for International Settlements, a global forum for central banks, has set out how rules for major clearing, settlement and payments services should also be applied to "systemic" or heavily used stablecoins.

This would mean a stablecoin operator must set up a legal entity which explains how it is governed and manages risks like cyber attacks.

Watch: What is bitcoin?

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