Bitcoin trading around $39,000 as California moves to embrace cryptocurrency

Bitcoin is trading around $39,000 after gaining 5% on Wednesday, the same day the Fed raised interest rates.

The cryptocurrency has gained in two of the past three days.

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Bitcoin remains down 14% year-to-date.

U.S. stocks soared after the Federal Reserve raised interest rates by a half a point for the first time in two decades and Chairman Jerome Powell signaled the economy can avoid a recession. 

This past year, stocks and cryptocurrencies have reacted to moves in monetary policy.

Cryptocurrencies have become a hot topic in California.

The state is looking into how to broadly adapt to cryptocurrency and related technologies, following a path laid out by President Biden in March. 

Gov. Gavin Newsom signed an executive order Wednesday for California agencies to move in tandem with the federal government to craft regulations for digital currencies. 

“Too often government lags behind technological advancements, so we’re getting ahead of the curve on this, laying the foundation to allow for consumers and business to thrive,” Newsom said in a statement.

The order also pertains to blockchain technology and how to incorporate its use in state operations. 

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Evolving blockchain and cryptocurrency technology “is potentially an explosive creator of new companies and new jobs and new opportunities,” said Dee Dee Myers, a senior advisor to Newsom and director of the Governor’s Office of Business and Economic Development.

“So there are a lot of opportunities,” she said. “There’s also a lot of unknowns in the industry and so that’s another reason we want to engage early.”

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Colorado Gov. Jared Polis says his state will begin accepting cryptocurrency for government services later this year.

The Associated Press contributed to this report.