Bitcoin price: Will G20 summit ignite cryptocurrency market?

The price of bitcoin surged past the $9,000 mark after the announcement on Wednesday.

The final communication of the First G20 Meeting of Finance Ministers and Central Bank Governors pledged to continue international monitoring of cryptocurrencies but acknowledged their benefits in “productive” discussions.

In a statement, the banking chiefs said: “We acknowledge that technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly.”

However, the news came with a caveat implying regulation would still be relevant to protect consumers and investors with issues concerning “market integrity, tax evasion, money laundering and terrorist financing”.

The G20 added bitcoin is not a currency but an asset, with the potential to be taxed in the future.

Will G20 2018 boost ignite cryptocurrency market?

Matthew Newton, analyst at cryptocurrency retailer eToro, said the G20 response was good news for crypto markets and they had reacted accordingly.

He told Express.co.uk: “The market has responded positively to the fact that economic powers seem to be taking cryptocurrencies seriously, with bitcoin climbing to above $9,000 after a week of stagnation.”

Mr Newton said bitcoin was “still a long way from being a stable currency” and had had a rocky start to 2018 so despite long-term investment keeping the market just above £8,000, investors must remain cautious about potential dips.

He said: “Price volatility will likely remain as we hear more from regulators and governments in the coming months, and investors need to be prepared for this.”

The finance expert said G20’s call for continued “international monitoring” of cryptocurrencies was just a preliminary step towards regulatory framework and no unified decisions had been made.

His comments were echoed by Vinay Sharma, senior trader at ayondo markets, who said finance chiefs will be monitoring if a crypto crash “could pose a substantial risk to the global financial system” but there was no rhetoric that suggested they believed this was a real possibility.

He said: “The reaction to G20 will be fairly muted as no real regulations were posed, only a suggestion that in time, some form of regulation will be looked at.

“I would imagine the crypto markets will continue on their merry way until concrete decisions have been made.”

Mr Sharma added cryptos were “here to stay” and there seemed to be some relative calm in the markets at present.

He stated: “That being said, I doubt we will be seeing the crazy valuation of $20,000 per bitcoin which we saw at the start of the year.

“The fact that the G20 leaders agreed that the classification of cryptos shouldn’t be as a currency tells me that it is unlikely there will be any great use for a crypto coin other than as a speculative asset.“