Crypto
Bitcoin Approaches $30,000 Fueled by First Republic Bank Collapse
If one compares Bitcoin’s run with that of the S&P 500, the former started an upward movement when the contracts of the bank index (US500) weakened influenced by the weakness of the banking sector. According to XTB analysts, the digital currency appears to be showing a significant resistance level around $30,000-31,000, a figure last seen in early summer 2022.
Bad news in the financial world benefits cryptocurrencies. After two weeks of trading at $27,000, Bitcoin is rising and is approaching $30,000 encouraged by the collapse of the First Republic Bank on the stock market, whose shares accumulate a fall of 70% in two days after reporting in its quarterly report a decrease of deposits worth $100 billion.
Other cryptocurrencies, such as Ethereum, rose almost 5% to $1,950 after recording 12% declines in recent days. Cardano also rises above 5% and the value of Solana has increased by 3.45%. Gains have also been favored by results that have exceeded market expectations, such as Alphabet and Microsoft, news that could mean that “the technology sector will have better results than companies in the financial sector,” XTB said.
If you want to read more details about Bitcoin and why its price benefited from the recent collapses in the banking crisis, download for free our companion app. The Born2Invest mobile app brings you the most important financial news of the day so you can stay on top of the market.
It is the second time this year that Bitcoin takes advantage of a banking crisis to climb on the stock market
The first time was in March, during the fall of Silicon Valley Bank and Signature Bank along with UBS’s purchase of Credit Suisse. In view of these reactions, many analysts in the cryptocurrency sector have indicated that the largest digital currency, due to its decentralization, could be seen as a “safe haven” asset in an environment of weak centralized finance. In other words, the rise that Bitcoin experienced during the second half of March could “not have been accidental”, and in fact, “Bitcoin is beginning to be perceived by the market as a ‘hedge.’
Thanks to these latest impulses, the dominance of Bitcoin in the world of cryptocurrencies increases and puts pressure on the rest of the digital currencies. Currently, its market share is 45%, but if the forecasts of analysts at Standard Chartered come true, this figure could rise to 55-60%. The latest analysis by the bank underlines that until now the economy surrounding Bitcoin “lacked the necessary confidence for the banking sector.”
If one compares Bitcoin’s run with that of the S&P 500, the former started an upward movement when the contracts of the bank index (US500) weakened influenced by the weakness of the banking sector. According to XTB analysts, the digital currency appears to be showing a significant resistance level around $30,000-31,000, a figure last seen in early summer 2022.
Another important point highlighted by Standard Chartered is that the stress among the ‘miners’ of this digital currency has decreased in the face of extraction costs of $15,000. The consequence is that much of the pressure on cryptocurrency prices has been removed.
The world of cryptocurrencies has woken up with a new litigation in court that also influences the price of digital currencies, in this case for the better
The Coinbase exchange platform has filed a lawsuit in a United States court to force the Securities and Exchange Commission (SEC) to respond “yes or no” to a request made by the company in July 2022. Said request asked the regulator to propose and adopt clearer guidelines for the cryptocurrency sector through a total of 50 specific questions on the regulatory treatment of certain digital assets.
This is the latest confrontation between the regulator and Coinbase. On March 23, the SEC notified the company about its staking service and an “undefined” portion of its listed digital assets. After receiving this notice, known as the Wells notice, the accused party had 30 days to respond with their defense. Otherwise, the US regulator would take action against Coinbase for possible violation of market law.
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(Featured image by vjkombajn via Pixabay)
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First published in elPeriodico, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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