LONDON:
Bitcoin hit a nine-month high on Tuesday, surging more than 30% in four days, as it shook off chaos in global markets after last week’s Silicon Valley bank collapse and hopes that U.S. interest rates won’t rise so quickly.
Bitcoin rose 9.6% to $26,533, its highest level since June 2022, for the fourth day in a row.
Major cryptocurrencies have rallied in recent days as US authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB).
The US authorities’ action helped stabilize the main USDC stablecoin, which had $3.3 billion in deposits with Circle’s issuer, SVB. The stability of the USDC, the second largest stablecoin and a major cog in digital token trading, has been positive for the crypto sector as a whole.
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Bitcoin, the largest cryptocurrency, led the fall of SVB and Signature Bank over the weekend, and earlier this month, all major banking partners of a number of crypto firms, Silvergate Bank.
Assets were helped on Tuesday, analysts said, by U.S. consumer price data that showed inflation was still rising, but at a slower pace than the previous month. The much-anticipated reading could lead the Federal Reserve to slow or even stop raising interest rates next week.
“The CPI data was very supportive of interest-rate-sensitive cryptocurrency assets like bitcoin, which was in line with expectations,” said James Butterfill, head of research at digital asset manager CoinShares.
Other factors also helped bitcoin, said Richard Asher, head of OTC trading at London-based crypto firm BCB Group, citing Binance’s move to convert its $1 billion industry recovery fund into tokens, including bitcoin.
Considering changes in stable coins and banks, #Binance The rest of the Industry Recovery Initiative’s $1 billion funds will be exchanged from BUSD to local cryptos, incl. #BTC, #BNB and ETH. Some stocks move in a chain. Transparency.
— CZ 🔶 Binance (@cz_binance) March 13, 2023
“Today’s CPI fall in line with expectations and the recent decline in global yields means that interest rate hikes may be on hold, as we breached our first target of $28,000 at $25,000,” Asher said.
