Cryptocurrency – which has been battered in the last month, finally took a breath of relief this week after the G20 summit in Argentina this past weekend. The international group of 20 countries released some better-than-expected statements, and that was bullish news to crypto traders and investors. Bitcoin (BTC) bounced up 10% to retest the $9,000 level, Ether (ETH) bounced from $450 to around $590, Litecoin (LTC) rebounded from $137 to $175, and Ripple (XRP) rebounded from $.55 to $.70. It seems that LTC has sprung back nicely from the 200-day exponential moving average, while BTC, ETH, and XRP are preparing to retest the line after popping up from the bottom of their Bollinger bands. Perhaps the good news from the G20 meeting will be the impetus that helps crypto break  through crucial resistance levels.

The first piece of good news is that the G20 Financial Stability Board Chair and Bank of England Governor Mark Carney told the nations’ finance ministers that crypto does not pose a risk to the global financial system. Carney stated that although crypto raise issues about consumer and investor protection, money laundering, and illicit activity, the problems are largely localized within the crypto economy, which has yet to reach even $1 trillion. He suggested that crypto does not pose a systemic risk in the same way that unregulated derivates and exotic financial instruments did in the 2000s.

The second piece of good news is that the G20 are moving to a consensus that crypto is not a currency but rather an asset. French Finance Minister Bruno Le Maire and Saudi Arabian Monetary Authority Governor Ahmed Alkholifey stated that crypto is not money or currency because it does not serve as a stable medium of exchange, evidenced by the extreme volatility this year. The position, which the US Internal Revenue Service (IRS) has long taken, means that trades involving crypto would be subject to capital gains tax instead of sales tax. The consensus might also exempt crypto from money transmission laws, though that is more tied in with anti-money laundering and know-your-customer regulations. The G20 countries are working to draft a global tax framework for crypto, and classification as an asset is an understandable first step.

The last piece of good news is that the G20 countries’ leaders have set a July deadline for a unified regulatory framework for crypto. Argentina Central Bank chair Frederico Sturzenegger stated: “In July we have to offer very concrete, very specific recommendations on, not ‘what do we regulate?’ but ‘what is the data we need?’” US Treasury Secretary Steve Mnuchin expressed concern about crypto use in illegal activities. The G20 also pledged to apply the Financial Action Task Force, an intergovernmental organization that fights money laundering and terror finance, to crypto. Though many in the crypto community dislike regulation, the upcoming framework is good because it helps prevent a patchwork of confusing, contradictory regulations among different nations. Also, a streamlined framework of regulation can help dispel the notion that crypto is synonymous with financial crime and dark web activity, instead emphasizing the legitimate and technologically innovate aspects.

As nobody really knows the driving factors behind price action, traders and investors can only assume that the weekend’s G20 summit helped propel the price jump. Whether BTC and ETH can break through strong resistance at about the $9,200 and $650 levels, is a key signal as to which direction price will go next. Investors should also keep in mind that BTC’s market capitalization dominance has jumped to 40%, meaning people are reallocating their portfolios from altcoins to BTC. Finally, the release of regulation recommendations in July will be big news.

The author owns a small amount of BTC and LTC.