In the past 24 hours, Bitcoin has continued its upward trend by recording impressive gains of more than 7.29%, as per data from Coinmarketcap.
Further, the market cap of all cryptocurrencies has surged over 6.01%, reaching $1.14 trillion. This rise followed an increase in the U.S. and Asian stock markets due to significant lenders such as J.P. Morgan and Goldman Sachs injecting $30 billion to rescue U.S.-based First Republic Bank from insolvency, fostering risk-on sentiments.
Markets uncertain about the future of rates
The latest inflation data for February in the United States showed that the inflation rate is slowing down, which has caused a stir in the financial markets. The CME FedWatch tool indicates an 84.1% chance that the Fed will increase interest rates by 25 bps, while the remaining traders predict that the Fed will keep the current rate.
As a result of this news, the dollar’s yield is decreasing, and investors are turning their attention to risk-on assets like stocks and cryptocurrencies. The potential shift away from quantitative tightening by the Fed has given investors hope that the market will remain bullish, which has led to a renewed interest in these assets.
With the market’s uncertainty and the possibility of interest rate changes, investors must monitor the situation carefully to make informed investment decisions.
The risk of a global banking crisis steers Bitcoin
The worldwide banking crisis is another factor that influenced Bitcoin’s price. Recently, Bitcoin experienced a significant surge in value, increasing by about $2,000 in a single day. This was in response to the U.S. Federal Reserve’s announcement that it would provide a $300 billion loan to some struggling U.S. banks, such as Signature Bank and Silicon Valley Bank.
Based on data from coinmarketcap, BTC experienced a surge in value, surpassing $22,000 and eventually reaching a peak of $26,500 on Tuesday, 14. This marked its highest price since June 2022. However, the bulls could not maintain this momentum as the bears entered the market, causing the value of the cryptocurrency to decline. As a result, bitcoin’s value slipped by $2,000 on Wednesday.
However, the U.S. central bank lent $300 billion to support struggling U.S. banks, with over $140 billion going to Signature Bank and SVB. This action significantly impacted Bitcoin’s price performance, causing the cryptocurrency to surge by a few thousand dollars and regain the $26,000 level.
At present, Bitcoin continues to trade at this level, which has resulted in its market capitalization rising above $514 billion. Additionally, Bitcoin’s dominance over other cryptocurrencies has increased, reaching 45.27%.