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Bitcoin is up 8% after Joe Biden announced an executive order on cryptocurrencies.

  • President Joe Biden announced his much-anticipated executive order on digital assets on Wednesday, sending bitcoin and other cryptocurrencies higher.
  • Biden's executive order aims to address the United States' lack of a framework for the growth of cryptocurrencies, which opponents warn risks lagging behind the rest of the globe.

Cryptocurrencies rose on Wednesday following the announcement of President Joe Biden's long-awaited executive order on digital assets, which took a positive attitude toward the industry.

Bitcoin was last trading at $41,944, up roughly 8%, according to Coin Metrics. Other cryptocurrencies, such as ether, also rose sharply.

The executive order, which aims to address the lack of a framework for the development of cryptocurrencies in the United States, has received widespread support from the industry and its investors. Critics have said that a lack of regulatory certainty might keep the United States back in the crypto space, allowing the rest of the world to catch up. The lack of regulatory clarity in the crypto industry has also been noted as an impediment to increased institutional adoption.

′′Over all timeframes, it's absolutely optimistic for the crypto ecosystem," said Travis Kling, CEO of Ikigai Asset Management. "It's easy to forget how far this ecosystem has come in terms of legality and US government stance over the previous two years, but this E.O. makes it plain that the US government is not prohibiting crypto, but rather embracing it."

The directive also calls for safeguards for American consumers, investors, and businesses, as well as safeguards for the US and global financial systems and systemic risk mitigation.

It also instructs the US government to look into "the technological infrastructure and capacity requirements for a future" central bank-issued digital currency.

The executive order, according to Treasury Secretary Yellen, "calls for a coordinated and comprehensive approach to digital asset policy."

The executive order launches off a six-month investigation of the cryptocurrency industry by regulatory organisations with jurisdiction. After seeing the results of the study and investigation, Kristin Smith, executive director of the Blockchain Association, told CNBC's "Crypto World" Wednesday that specific policy proposals from various regulatory bodies might be made at the end of the six-month period.

"The drawback and risk is that the government will go through this analysis and ultimately recommend rules that are more stringent than the crypto business can handle, driving innovation outside," she said.

Smith noted that she isn't concerned that this will happen across the board.

"We'll have a fantastic opportunity to engage," she said. "As public awareness of the business grows, lawmakers are increasingly receptive to what we think to be sensible policies in the industry."