Crypto recoup some losses as White House plans ‘constructive approach’

Bitcoin and Ethereum recovered some of their losses overnight after some fears about President Biden’s crypto order eased on the back of remarks by the US Treasury Secretary that were “accidentally published”.

Bitcoin climbed 8.82% to go back over the key US$40,000 level to US$41,604 while Ethereum rose 8.10% to US$2,724.

US Treasury Secretary Janet Yellen inadvertently published a statement yesterday, which was scheduled for release on Wednesday, which said a presidential executive order on cryptocurrencies “support responsible innovation” and coordinates US policy “across agencies”.

According to Ipek Ozkardeskaya, a senior analyst at Swissquote, the order “caused much fear and stress among the crypto traders”.

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

With Bitcoin reaching US$41,000 as a result, “we could see some more positiveness building toward the US$45,000 in the coming hours.”

Crypto’s supposed ability to act as a haven in times of economic uncertainty and political unrest has been questioned heavily by analysts and traders alike since the turn of the year.

Yesterday’s banning of Russian oil by the US, and phased approach by the UK and EU, will create a domino effect for cryptocurencies, said Naeem Aslam, market analyst at AvaTrade.

With oil at long-term higher and gold flirting with its all-time highs above US$2,000, and cryptos recent rally may point towards investor opinion swinging back once again towards it being viewed as a store of value asset, Aslam said.

He adds that “it seems that some of the safe haven trade is coming back to Bitcoin, as both gold and Bitcoin are moving higher.”

Looking at the biggest altcoin movers, Terra was up 22% to US$97.18, Solana climbed 6.81% to US$88.54 and Avalanche rose 9.99% to US$78.95.