The ongoing banking crisis in the United States is driving up the price of Bitcoin in the market, with a 34% weekly rally.
The price of Bitcoin has hit a new high this 2023, trading above $28.400 per BTC at the time of writing this article.
Data consulted on CoinMarketCap, one of the most referenced cryptocurrency price platforms in the industry, shows that Bitcoin is up 34,61% on the week and 3,66% in the last few hoursOne of the main reasons behind this price increase, according to analysts, is the measures that the US Federal Reserve (FED) has taken in recent days to curb the banking crisis.
Last Friday, the American bank Silicon Valley Bank officially declared bankruptcy. Also, the regional bank Signature Bank declared bankruptcy. To stop the crisis and avoid contagion, the FED has turned on its printer and has injected several billion dollars to the banking system, according to Fortune.
Since the closure of banks and the measures implemented by the FED, the price of Bitcoin has risen exponentially, reaching its highest price since last June 2022.
So far this year, the price of Bitcoin has grown by nearly 69%, placing the cryptocurrency as the world's highest performing asset in 2023, according to data from Goldman Sachs.
Source: CoinMarketCap
The industry's second most capitalized cryptocurrency, Ethereum, has also benefited from the measures announced by the FED. According to CoinMarketCap, Ethereum is trading above $1.820, representing a weekly increase in its price of 18%.
Other crypto assets such as BNB, XRP, Cardano, Polygon, Dogecoin and Solana, which are among the top 10 most valued cryptocurrencies in the crypto market, are also recovering and showing an upward rally between 8% and 20% weekly.
Bitcoin as a hedge against inflation
According to Bloomberg analysts, concerns about the ongoing banking crisis have led investors to re-evaluate Bitcoin as an efficient hedge against inflation, despite the volatility that the crypto market experienced last year and which led to the price of BTC touching $15.000 per unit.
On the other hand, Morgan Stanley analysts believe that Bitcoin is in its moment to “shine” as an alternative to the financial system current. According to Yahoo Finance, the financial multinational highlighted in a report this week that Bitcoin was created to operate without the need for banks, allowing users to regain control and power over their own funds and assets as well as how they manage them.
However, while Bitcoin can operate without the need for banks or other financial institutions, Morgan Stanley also points out that the cryptocurrency is not completely detached from the banking system and so currently behaves as a speculative asset.
Still, Bitcoiners and the crypto community remain optimistic about the market’s top cryptocurrency closing higher. Will Clemente, co-founder of Reflexivity Research, believes that Bitcoin will become the only “true alternative” as investors and users wake up to the manipulated illusion that is the current financial system.
The Fed will meet next Wednesday to discuss new measures against inflation. Analysts expect the banking regulator to keep interest rate increases at 25 basis points.
Continue reading: Jameson Lopp: “I regret not buying more Bitcoin”
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
