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Bitcoin Skyrockets to 9-Month High, Defying Chaos in Global Markets After Banking Collapse – What’s Next?

Published by
WIlliam Dube
  1. Bitcoin surged over 30% in four days, reaching a nine-month high of $26,533, despite the recent chaos in global markets following the collapse of Silicon Valley Bank.
  2. The cryptocurrency industry has been buoyed by U.S. authorities’ plans to limit the fallout from the bank’s collapse, which have had a stabilizing effect on the major USDC stablecoin, a crucial element in digital token trading.
  3. Bitcoin has taken in its stride the collapses of several key banking partners, including Silicon Valley Bank, Signature Bank, and Silvergate Bank, and has been supported by recent U.S. consumer price data that showed inflation still rising at a slower pace than the previous month, which may lead the Federal Reserve to slow or pause its interest rate hikes next week.

Bitcoin’s rally gathered pace as the cryptocurrency hit its highest level in nine months, soaring past a 30% gain in four days despite the chaos in global markets following the collapse of Silicon Valley Bank. On Tuesday, bitcoin surged as much as 9.6% to $26,533, marking its fourth consecutive day of gains and reaching its highest since June 2022.

The recent major collapses of key banking partners, including Silicon Valley Bank, Signature Bank, and Silvergate Bank, have not derailed bitcoin. Additionally, recent plans announced by U.S. authorities to limit the fallout from Silicon Valley Bank’s collapse have had a stabilizing effect on the major USDC stablecoin, the second-largest stablecoin and a crucial element in digital token trading. This has been seen as positive for the crypto sector as a whole.

Bitcoin’s strength was also attributed to recent U.S. consumer price data, which indicated inflation was still rising, albeit at a slower pace than the previous month. The anticipated reading could lead the Federal Reserve to slow or even pause its interest rate hikes next week.

James Butterfill, head of research at CoinShares, a digital asset manager, said, “CPI data being in line with expectations has been very supportive for interest rate-sensitive crypto assets such as bitcoin.”

Richard Usher, head of over-the-counter trading at London crypto firm BCB Group, also cited other factors contributing to bitcoin’s rise, including Binance exchange’s conversion of its $1 billion industry recovery fund to tokens that included bitcoin.

“With CPI falling in line with expectations today and the recent fall in global yields signalling that interest rate hikes may be pared back, we have broken $25,000 with $28,000 the first target,” said Usher.

The recent surge in bitcoin is positive news for the cryptocurrency industry, which has faced significant volatility and regulatory scrutiny in recent years. As of late, however, there has been a notable uptick in institutional investment in cryptocurrencies, which has helped drive prices higher.

WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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Published by
WIlliam Dube

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