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Bitcoin at its highest amid bank turmoil.

Bit­coin hit its highest level in nine months yes­ter­day as crypto traders shif­ted funds away from banks and warmed to rap­idly shift­ing interest rate expect­a­tions.

The dol­lar-denom­in­ated price of the ori­ginal and biggest crypto coin has surged more than 30 per cent this week to more than $27,000, its highest point since the onset of the crisis of con­fid­ence that engulfed the mar­ket last sum­mer.The second-largest token, ether, has risen a fifth in the same period.Buy­ers have emerged after a week of acute tur­bu­lence for the world’s bank­ing industry on both sides of the Atlantic as investors fret over the valu­ations of smal­ler banks’ bond port­fo­lios and busi­ness mod­els.

‘Fears over the sta­bil­ity of the bank­ing sys­tem cre­ates a good envir­on­ment for bit­coin to rebound’

with tra­di­tional stock indices such as the S&P 500 and the Nas­daq Com­pos­ite, and sens­it­ive to traders’ expect­a­tions on interest rates.

Traders poin­ted out that when investors have fears over crypto prices, they move funds into bank depos­its and stable­coins. When there are con­cerns over banks, they rap­idly move to pur­chas­ing tokens.

«Fears over the sta­bil­ity of the bank­ing sys­tem, along with declin­ing real interest rates, cre­ates a good envir­on­ment for bit­coin to rebound because some investors see it as a hedge against sys­temic risks,» said Ilan Solot, co-head of digital assets at Lon­don broker Marex.

The mar­ket recov­ery has also been bolstered after reas­sur­ances from US author­it­ies that depos­its at the failed Sil­icon Val­ley Bank would be pro­tec­ted.

www.sba.tax 

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Comments

  1. Eleonor18 March 2023 at 11:17

    Can you imagine how things would look like if Wall Street banks didn't come in and help some of these failing banks? Even if things seem bad now, imaging how they would be without any intervention.

    ReplyDelete
    Replies
    1. Mark18 March 2023 at 12:52

      It would have been awful. More banks would be in trouble. Stocks would go down 20-40% more across the board. Bitcoin and cryptos would be up another 10% at least.

      Delete

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