Cryptocurrencies were gaining momentum on Thursday, with bitcoin reclaiming the $8,000 level after falling as low as $6,000 just three days ago.
It appeared the digital currency sector was achieving some immunity from the stream of negative news flow as the gains on Thursday came despite reports of further criticism from officials who would like to see deeper oversight of cryptocurrencies.
On Thursday, European Central Bank executive board member Yves Mersch (left) - in an interview by Bloomberg - said it would take a global effort to rein in the "public hype" surrounding the trade of cryptocurrencies.
“We need more information,” Mersch told Bloomberg. “For me, one obligation would already be to force the unregulated platforms to report transactions in a harmonised way to repositories so that we would have access to information - also in order to create a better response.”
He also explained his concerns about the potential for a systemic impact from the digital currency realm.
"If you increasingly have bridges between the virtual world and the real world and then there is a collapse in this virtual world, it could drain liquidity from the real world,” he said. “This then becomes a concern for the central bank.”
Mersch was echoing sentiments expressed two days earlier by the general manager of the Bank for International Settlements (BIS) Augustin Carstens.
Carstens said global regulatory authorities had a duty to clamp down on cryptocurrencies, which he called a combination of a "bubble, a Ponzi scheme and an environmental disaster".
"The volatility of bitcoin renders it a poor means of payment and a crazy way to store value," Carstens said.
Japan, meanwhile, said on Thursday its financial regulator would launch on-site checks of seveal cryptocurrency exchanges that could be vulnerable to hacking. This followed the theft, nearly two weeks ago, of around $530m in the NEM digital currency from Tokyo-based exchange CoinCheck.
After some robust early gains, sentiment for cyptocurrencies on Thursday appeared to be fading. Bitcoin, however, remained 4% higher at $8,212.
- Ethereum rose 3% to $819.43
- Ripple gained 1.48% to $0.750
- Litecoin added 0.22% to $143.94
- NEM lost 0.44% to $0.558
Picture by Wikimedia Commons