Britain’s Treasury Comments Send Virtual Currency Prices Higher

Bitcoin was up 2% while BNC 2.0 Index coins such as Stellar and Counterparty were rising strongly on Wednesday morning following HM Treasury’s call for information.

Photo: Eric Johnstone/Flickr

Photo: Eric Johnstone/Flickr

After a volatile drop at the end of last week, bitcoin showed the first signs of gaining some upward price traction Wednesday morning after  the UK Treasury called for information on virtual currencies.

Bitcoin was trading at $331 on Wednesday following the announcement.

The announcement was reminiscent of Bernanke’s 2013 comments that virtual currencies hold “promise” which in part pushed the price of bitcoin over the $1000-mark.

Forecasts prior to the announcement by the UK Treasury for the virtual currency were in line with the previous month’s trading activity of $300-$400 as volumes showed no signs of decreasing. A decrease in bitcoin volumes is considered a bullish indicator since much of this year’s trading has consisted of miner’s selling into the market on Chinese exchanges.

In the past 24 hours however, bitcoin’s price increase has been coupled with a sharp spike in volumes after HM Treasury’s comments.

“The government is calling for views from a wide range of sources including the public, FinTech firms, the financial services industry, regulators and law enforcement agencies on the potential digital currencies have for delivering new, helpful ways for customers to make payments and for encouraging innovation in our world leading financial sector,” HM Treasury said in a statement.

“Hundreds” of other currencies

However, the biggest boon may be the effect on other digital currencies, particularly those with multiple applications and features such as the BNC 2.0 Index coins.

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“Bitcoin is perhaps the best known example of a digital currency, but hundreds of others are currently in circulation, with a variety of different characteristics,” said HM Treasury.

“The government considers these currencies have the potential to deliver real benefits to customers. Proponents say that they can make payments for users faster, more convenient and more secure, and mean lower fees for businesses than if they were accepting payment by traditional means.”

Justcoin’s Stellar was 21% higher at $0.0015 following the news. Other big winners included BitSharesX, a coin which can be used to make equity purchases, up nearly 7%, and the best known of all BNC 2.0 Index coins, Counterparty, which was 5% higher.

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