Bitcoin jumps after Yellen’s apparent statement eases fears of US crackdown

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A representation of the Bitcoin cryptocurrency is seen in this illustration taken August 6, 2021. REUTERS/Dado Ruvic/Illustration

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March 9 (Reuters) – Bitcoin led a rally in cryptocurrencies on Wednesday after what appeared to be a premature U.S. Treasury statement allayed market concerns over a sudden tightening of U.S. rules on digital assets.

In a statement that briefly appeared on the Treasury website before it was removed, 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 (which) supports responsible innovation.” CoinDesk has released an archived version of the release.

The US Treasury Department did not immediately respond to Reuters’ emailed request for comment on the after-hours statement.

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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 U.S. central bank digital currency. Read more

Last year, the White House said it was considering widespread oversight of the cryptocurrency market — including an executive order — to address the growing threat of ransomware and other cybercrimes.

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

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

Bitcoin rose 8.9% to $42,188, on track for its biggest gain since Feb. 28, while smaller peer Ether, the coin tied to the Ethereum blockchain network, added 7% to $2,759, also on course for its best day this month.

U.S. exchange-traded funds (ETFs) that track bitcoin futures that gained regulatory approval late last year also surged in premarket trading. ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF (BTF.O) jumped around 9.5% each.

US crypto miners that act as proxies for digital coin movements have also been on the rise. Riot Blockchain (RIOT.O) jumped 9% and Marathon Digital Holdings (MARA.O) 7.5%, while crypto exchange Coinbase Global Inc (COIN.O) added 7%.

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Reporting by Kevin Buckland, Tom Westbrook and Medha Singh; Additional reporting by Alun John; Editing by Sam Holmes and Krishna Chandra Eluri

Our standards: The Thomson Reuters Trust Principles.

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