The move is part of a surge that began in 2023 and has since witnessed the most popular cryptocurrency gain more than 80%.
Bitcoin (BTC) surpassed the $30,000 mark for the first time since June 10, 2022, as the banking crises of March faded in the distance and investors’ confidence in the monetary policy of the U.S. central bank increased.
The biggest cryptocurrency by market capitalization was recently up 6.75% over the previous 24 hours, trading at $30,237.
According to Richard Mico, the U.S. CEO and chief legal officer of Banxa, a provider of payment-and-compliance infrastructure for cryptocurrencies, “it’s clear that the market is pricing a slowdown in growth and in turn a loosening of monetary policy by the Federal Reserve over the course of 2023.” Simply observe the bond market to see proof of this.
The U.S. 2-Year Treasury note has dropped to around 4% from a peak above 5% in early March, according to a look at the bond market, as traders swiftly reversed their predictions of future Fed rate hikes.
As a result, Mico continued, “There will probably still be a lot of liquidity injected into the market.” “Bitcoin has already been the best-performing asset of 2023, and it typically is the asset that responds most swiftly and violently to such types of monetary shifts.”
Bitcoin reached on June 10, 2022, at a price of $30,000 before dropping to a low of about $20,000, where it stayed for the majority of the remaining months of the year and the first few weeks of 2023. It has been fluctuating around $28,000 for the past three weeks as cautious investors analyzed the effects of a banking system that is on the verge of collapse, ongoing inflationary pressures, and other macroeconomic challenges. Beginning 2023 with a price of around $16,600, Bitcoin has grown by about 80% so far this year.
Following the failure of Silicon Valley and Signature bank in late March, the crypto market gained momentum as some investors began to doubt the stability of the current monetary system and rediscover their appetite for investments that maintain their value. The crypto market had surged in January amid signs that inflation was slowing down. It then stalled in February but picked up again in late March. A recent increase in gold prices has seen it reach $2,000 for the first time since 2020.
The banking crisis, according to Mico, is undoubtedly causing a narrative shift that is accelerating Bitcoin’s growth. He continued: “BTC is also being seen as a reliable store of value that lacks the issues that come with storing your money through a third-party intermediary, or a bank.” BTC is now starting to be seen as a risk-free investment.
According to Mico, the de-dollarization of economies is also increasingly becoming a factor, which speeds up the acceptance of cryptocurrencies like Bitcoin. . “In essence, with Bitcoin, you are your own bank. Given the recent volatility, it can be challenging to predict the future, but I wouldn’t be surprised if the momentum for BTC continues.
Bob Ras, a co-founder of Sologenic, a blockchain-powered network for tokenizing securities, stated that Bitcoin had decoupled from stocks and proven “its increasing appeal as a safe haven for investors.
While the 2020–2021 period was believed to be Bitcoin’s breakout year, Ras stated that the current period genuinely signifies the asset’s ascendance onto the global stage as a formidable one. “Bitcoin has shown to be the dependable refuge that many had anticipated in the face of heightened global instability, failing financial institutions, and rising concerns regarding reserve currencies. The digital asset sector has advanced significantly at this crucial stage.”