Major cryptocurrencies rose on Wednesday evening following remarks from the U.S. Federal Reserve Chair Jerome Powell during his congressional testimony that crypto industry has “staying power.”

What Happened: Bitcoin reached new heights on Wednesday evening, exceeding $30,000 and leading gains among the top 10 non-stablecoin cryptocurrencies by market capitalization. The rally was fueled by the recent news of major financial institutions exploring the crypto space, including BlackRock’s announcement of a Bitcoin ETF application last week.

Powell emphasized the importance of a strong federal oversight role for stablecoins.

During a questioning session with Maxine Waters (D-CA.), Powell stated that private companies issuing tokens pegged to the value of a sovereign currency, like the US dollar, should require robust federal oversight.

“We do see payments stablecoins as a form of money, and in all advanced economies, the ultimate source of credibility in money is the central bank,” Powell said. “We believe that it would be appropriate to have quite a robust federal role in what happens in stable coins going forward.”

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At the time of writing, the global crypto market capitalization stood at $1.18 trillion, an increase of 4.47% over the last day. 

US stocks retreated on Wednesday as investors paused to evaluate Powell’s comments on inflation.

The S&P 500 dropped by 0.52%, while the Nasdaq Composite slid 1.21%. During a Wednesday statement, Powell mentioned that the central bank plans to implement more rate hikes to counter inflation. 

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” Powell said in prepared remarks for the House Financial Services Committee.

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Analyst Notes: “The cryptoverse is alive. Bitcoin is surging after a few financial giants have made commitments to crypto. It started with BlackRock’s Bitcoin ETF filing and now others are following.  Who needs regulatory clarity if you see BlackRock making a move. The SEC has been playing hardball with a Bitcoin ETF and crypto watchers are speculating that BlackRock knows something, ” said Edward Moya, Senior Market Analyst at OANDA. 

He added, “Bitcoin momentum may last a little longer, but it will need to hear good news from the SEC to see a sustained rally target in the mid-$30,000 region.”

Crypto analyst Michael Van de Poppe gives out his expectation for BTC. He anticipates a period of consolidation to occur soon, with a potential for a retest of $30,000 before calming down. However, he does not expect a significant correction and suggests that $28,000 may be the lowest point. “Until the new acceleration starts, Altcoins [will] pace up.”

Veteran trader Peter Brandt said, “Bitcoin is the legacy coin and will outlast and out-value all of the make-believe crypto wannabes.” 

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