Markets bounce back after positive G-20 comments about crypto
After a steep drop in the crypto markets, the positive statements about cryptocurrency from various bodies governing finances for the G-20 countries have sparked a resurgence in the market again. Ethereum and Bitcoin prices saw close to 10% increase at the time of the announcements, mainly from the Financial Stability Body.
Hours before the beginning of the G-20 summit, the FSB rejected pleas from several countries to regulate cryptocurrencies. Mark Carney, the president of the FSB said in a letter to the finance ministers and governors of central banks
The first assessment of the FSB is that currently, these crypto-assets do not pose a risk to global financial stability.
This committee will meet in Buenos Aires on today and tomorrow. The letter also laid emphasis on the fact that the focus of the regulatory bodies will be mainly to fix existing rules, rather than design new laws and frameworks. Carney said in the same letter –
As its work to fix the fault lines that caused the financial crisis draws to a close, the FSB is increasingly pivoting away from design of new policy initiatives towards dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms.
He further added that the value of cryptocurrencies even at their peak contributed to a very small portion of the global GDP, while in comparison, the credit default swaps just before the global economic crisis was a 100 % of the global GDP.
While most of the regulatory bodies maintain the same stance that cryptocurrencies pose a very small threat to global financial stability, these announcements provided the market with the much-needed respite. There has been a slew of bad press towards crypto over the past few weeks and this is welcome.
Whether this bounce sparks a reversal of sorts remains to be seen, but it is good to see that common sense has prevailed before the G-20 summit begins. We hope to see more of the same in the coming days.