Bitcoin Catches Breath After Huge Losses, Recovers Above $7,500

While price movements of a few percentage points are enough to believe that a fiat currency is on a rapid rise or intimidating crash, the same logic does not apply to bitcoin. Instead, movements of double-digit points are becoming increasingly more common. On Wednesday, the digital currency rose by more than 20 percent from its closing level yesterday, a day after bitcoin was seen trading more than 20 percent lower.

Bitcoin climbed by 22.66 percent since yesterday to reach 7,725.5 U.S. dollars on Wednesday. However, the digital currency is still below its closing level on Friday at 8,830.75 dollars. Ethereum had a bigger climb by 30.31 percent to 782.5 dollars, while the overall cryptocurrency market capitalization increased from as little as 279.9 billion dollars yesterday to 364.5 billion dollars today.

The cryptocurrency world faced waves of disapproval and condemnation from government regulators and private institutions in most of the major markets for digital assets in the past weeks. The pace of new bans and tighter regulations resulting from that has picked up rather exceptionally since last week, taking bitcoin on a swift decline below a number of major levels in the matter of a few days.

However, bitcoin and other digital currencies were quick to turn around today following testimonies made by directors of two of the main regulatory bodies in the United States. Jay Clayton, the head of the U.S. Securities and Exchange Commission, spoke about cryptocurrencies in front of the Senate Committee on Banking, Housing and Urban Affairs yesterday. Clayton said that more regulations on a federal level could be necessary to ensure law compliance by cryptocurrency trading platforms.

He added that the current level of protection that these exchanges have is unsatisfactory. Despite his demand for more regulations, his remarks were viewed positively by bitcoin investors since his aim appears to be protecting investment, rather than banning or restricting trading.

Commodity Futures Trading Commission Chairman J. Christopher Giancarlo also had his own testimony to give. Giancarlo struck an even more positive tone by highlighting the work done to safeguard investors, including the introduction of bitcoin futures market, which operates under the control of his agency.

Giancarlo also emphasized the efforts made by Treasury Secretary Steven Mnuchin to coordinate the endeavors of the SEC and the CFTC. The overall ambiance of the Senate committee meeting was that regulators aspire to have a balanced approach that protects consumers and traders without clamping down on new innovative technologies.