For cryptocurrencies, the week began with a negative report from the Bank for International Settlements (BIS), a consortium of some 60 central banks from around the world. The BIS issued a report Monday that was highly critical of the digital currency space.
The 24-page article alleged that digital currencies like bitcoin (BTC) are "not scalable" to a sufficient degree to ever be able to function as money within the global economy. The report cited the proof-of-work consensus mechanisms used to govern the blockchain systems underlying these digital currencies. But despite the BIS report, cryptocurrencies were able to turn around a period of sustained losses later in the week, climbing by $13 billion as a group in the span of just a single hour.
BTC and ETH Led the Way
On June 18, BTC and ethereum (ETH) led the surge in cryptocurrency prices, climbing by roughly 4% by midday, according to Coin Telegraph. By that point, the total market cap of all digital currencies was roughly $289.2 billion, marking a gain of about $13 billion, which occurred over the period of about an hour. That total approached the most recent local high of $300 billion in total market cap achieved on June 12.
BIS Report Impact?
The BIS report was fairly scathing, suggesting that "the more people use a cryptocurrency, the more cumbersome payments become." One of the most popular lines from the report included the suggestion that storage demands associated with cryptocurrency adoption on a large scale could be so heavy as to "bring the internet to a halt."
Nonetheless, despite the harsh words in the BIS report, cryptocurrencies have been relatively stable since the report was issued. In the past 24 hours, ETH and BTC have posted gains of less than 1% each, while most of the other digital tokens in the top 10 have declined by a similar margin. ETH has been bolstered by remarks from officials at the U.S. Securities and Exchange Commission who have suggested that it will not be classified as a security under U.S. law. As is often the case with cryptocurrencies, however, the question will be whether these coins and tokens will be able to hold the gains made over the past few days.
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