On Sunday afternoon, the world’s largest cryptocurrency by market capitalization, Bitcoin, hit the $28,000 mark, levels it had not since mid-last year. As of this writing, the most famous digital coin is trading at $28,300, according to data from CoinGecko.
Bitcoin gained over 28% over the past seven days and 4.3% in the last 24 hours. As a result, the token’s market cap increased to $546.6 billion from $523.2 million recorded the previous day. Now this means Bitcoin only needs a $24 billion increase to overtake Tesla and become the tenth-biggest asset by market cap. Currently, Tesla’s total market value stands at $569.6 billion.
The crypto market valuation is $1.18 trillion at press time, representing a 1.3% surge over the past 24 hours. Bitcoin accounts for 45% of this valuation.
What’s Behind the Recent Bitcoin Rally?
The surge in BTC price is largely driven by speculations that the Fed could pause or slow the pace of hiking interest rates this week following the collapse of Signature Bank and Silicon Valley Bank, which have caused an industry contagion. A CME’s FedWatch tool indicates a 74% possibility that the rates will be increased by 25 basis points.
Meanwhile, financial analysts Manas Agrawal and Gautam Chhugani from private wealth manager Bernstein said that the current BTC rally was due to a change in investors’ perspective that uninsured deposits in traditional banks are no longer a safe haven like before.
The pair claimed that investors are now choosing Bitcoin because it poses no counter-party risks, is decentralized, and makes self-custody possible.
Agrawal said that despite Bitcoin being highly volatile, it has outperformed stocks, USD, and gold over long periods.
Bitcoin maxis have been loud on Twitter over the past few days, with many feeling bullish about the asset. A Twitter user (@MartiniGuyYT) wrote that if another bank bailout happens this week, then Bitcoin will reach $30,000.
Another user (@QuitenFrancois) claimed that if anyone had invested $10,000 in Credit Suisse at its peak, that investment would only be worth $60 today. He added that he would rather risk his money in Bitcoin.