While Banking Crisis Takes Toll, Crypto Economy Takes the Lead
The present banking crisis is working as an opportunity and also as a sign of bringing prosperity back into the crypto economy.
After inflicting massive devaluation since mid-November 2021, Bitcoin is rebounding back mainly because the digital currency rally is continuing. As a result whereof, Bitcoin succeeded in surpassing $26,000 on Friday.
Within this week, Bitcoin saw its value surpassing $26,000 twice which indicates that the momentum is there.
According to the statistics of Coin Metrics, Bitcoin ended Friday’s trading session with an overall increase of 7.46% i.e. $26,868.
Within this week alone, Bitcoin’s surge was recorded at more than 34%. Such a significant weekly gain was last by Bitcoin in January 2021.
Side by side with Bitcoin, second lead crypto Ethereum, also rose high by at least 3.87% leading the value above $1,745.
Ethereum’s weekly gains were recorded to be more than 22% which also turned out to be the best since August 2021.
Credit Suisse Factor
The global crypto economy was further boosted on Friday when it saw the stock markets going down harshly. Stocks market downturn was attributed to Credit Suisse, a prominent bank that is in desperate need of investors’ trust.
Not even Credit Suisse promise of obtaining a $54 Billion loan from Swiss National Bank was enough for reinstating the trust back.
Liquidity Situation
Dessislava Aubert, who is part of the crypto data entity, Kaiko, as an analyst, stated that Bitcoin is on a rally.
He argued that liquidity has always been a sensitive issue for Bitcoin, however, liquidity seems to have bettered and improved recently.
It has been reported in the media that the US banking system is receiving liquidity from the Federal Reserve. It has been further noted that liquidity has been provided to banks against less valued collateral.
Meanwhile, the banks in China also have been receiving financial assistance as liquidity by reducing the reserve average applicable to banks.
Bitbank Expert’s Prediction for Bitcoin
A prediction with regard to Bitcoin has been made by a Japanese expert namely Yuya Hasegawa who is part of a local crypto platform called ‘Bitbank’.
Hasegawa stated that the Bitcoin bull market is about to come when Bitcoin has gone past $26,000. He further claimed that perhaps the bull has already begun without any prominent indication to anyone.
Similar were the views of Katie Stockton of Fairlead Strategies. She suggested that Bitcoin twice moving beyond $25,200 could be an indication of stronger bulls.
If they start entering the trend, things may become more interesting for the investors. They may start pouring in huge stacks of money to push Bitcoin’s price higher and higher.
This would end up bringing in more enthusiastic investors wanting to make the most of the situation. They will continue supporting the trend hoping to run the bullish rally for a longer period.
If what Stockton has speculated turns out to be true, then the entire crypto market capitalization would surge tremendously alongside Bitcoin.
Investors’ Response to Crypto Market Rise
On the other hand, investors have taken serious note of the crypto market rise, in particular after acknowledging the banking sector crisis.
The present week began with the groundbreaking news pertaining to the closure of Silicon Valley Bank which was later followed by Signature Bank.
However, the focus was seen diverting toward the First Republic Bank (FRB). The bank saw huge support coming from several major banks in the US which wanted to help FRB in overcoming the $30 Billion deposit crisis.
General sentiment amongst a lesser majority is that the Bitcoin surge is due to the prevailing banking sector crisis.
However, the majority view remains unchanged which is that the crypto market rise is deriving impetus from the Federal Reserve rate hikes and inflation.
The good thing regarding the crypto industry is that bulls are coming in and a further rise is expected soon.