Bitcoin up 8% as Biden announces executive order on cryptocurrencies

Bitcoin and other cryptocurrencies were higher on Wednesday after President Joe Biden announced his highly-anticipated executive order on digital assets that appeared to take a supportive stance toward the industry.

Bitcoin was trading at $42,118.73, around 8% higher as of 6:30 a.m. ET, according to data from CoinDesk. Other cryptocurrencies including ether were also sharply higher.

But the initial spike in prices came ahead of the executive order announcement. The rally began just after 6 p.m. ET Tuesday after the Treasury published details and a statement online in response to the upcoming executive order from the U.S. president on cryptocurrencies. The statement from Treasury Secretary Janet Yellen was unpublished shortly after. Yellen's statement was then published again on Wednesday.

Biden's executive order attempts to address lack of a framework for the development of cryptocurrencies in the U.S., which critics say could leave the country's industry behind the rest of the world.

"The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate," the executive order says.

Biden's policy calls for measures to protect American consumers, investors and businesses, and to protect the U.S. and the global financial system and mitigate systemic risk.

The executive order also directs the U.S. government to explore "the technological infrastructure and capacity needs for a potential" central bank digital currency. That is a digital currency that would be issued by a central bank unlike a cryptocurrency such as bitcoin which is not controlled or issued by a single entity.

Treasury Secretary Yellen said in her statement on Wednesday that the executive order "calls for a coordinated and comprehensive approach to digital asset policy."

The executive order appears to be broadly welcomed by the cryptocurrency industry and investors.

When Yellen's statement was initially published ahead of the official executive order, Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, called the executive order a "constructive approach to thoughtful crypto regulation."