What happened
The prices of many altcoins were rising high on Wednesday in a widespread rally emanating from the top down. The top, in this case, is President Joe Biden, who signed an executive order on cryptocurrencies that really gave some zip to the asset class.
It was hard to go wrong today with crypto holdings. Cardano (ADA 2.46%) and Solana (SOL 3.40%) were both up by over 5% as of mid-afternoon trading, while Polkadot (DOT 0.20%) lagged slightly behind them. Enjoying higher pops were Arweave (AR -2.62%) and Near (NEAR 12.01%), both of which were inching toward a 17% gain.
So what
Citing statistics showing that roughly 16% of adult Americans have transacted in cryptocurrencies, the White House wrote in a fact sheet that it was taking "the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology."
The Biden administration pledged to work with the relevant government agencies to create policies "that guard against risks and guide responsible innovation." Interestingly, one of its priorities is to explore the possibility of creating a central bank digital currency (CBDC).
Image source: Getty Images.
Now what
Certain investors aren't fond of what they consider to be excessive regulation and oversight, but generally, such initiatives are seen as positive developments. Much of the cryptocurrency space is still a Wild West, and a sober analysis from third parties like federal government agencies should lead to risk reduction and tighter security for investors -- assuming that the coming recommendations are sensible and lead to beneficial policy changes and actions.
Keep an eye on this space to see how the government's initiative develops.
