Bitcoin Just Got Higher and Higher in Mid-March

Despite all the craziness surrounding some of America’s banks (i.e., Signature, etc.), bitcoin is defying all odds and rising like nobody thought possible during times like these.

Bitcoin Is Defying All Expectations

At the time of writing, bitcoin has shot beyond the $26,500 mark, and some analysts believe it’s on its way to $30,000 per unit. The currency has risen by more than 15 percent in just a matter of days, and the news appears to stem from the low inflation numbers that have since arrived. This has led some to speculate that rate hikes won’t be so bad anymore in 2023, and that the Fed may proceed with just another 25 point hike before pausing indefinitely from here on out.

If this were to occur, one can bet bitcoin and many other forms of crypto will endure meteoric rises. It was the rising of interest rates that caused digital assets to crash so badly in 2022, so one can assume that walking in the opposite direction will allow them to heal.

Bitcoin isn’t the only asset shooting up at press time. Its cousin Ethereum is also on a serious bull run, having moved up by more than 7.5 percent in the last 24 hours. Enrico Rubboli – CEO of blockchain scaling provider Mint Layer – said in an interview:

[The] Silicon Valley Bank meltdown has directed a lot of attention on the permissionless and autonomous nature of bitcoin for storing savings. Combined with a low CPI print, the price of bitcoin is pulling retail into the crypto economy again.

Ahmed Negm – head of market research at multi-asset brokerage MENA at XS.com – also threw his two cents into the mix, stating:

Confidence in the banking sector has been eroding among some investors who could find themselves moving toward alternative assets like bitcoin, which have strongly benefitted during this crisis. Cryptocurrencies in general could see positive performances while interest rate expectations softened compared to last week.

Discussing the lower-than-expected inflation was Owen Lau, an analyst at Oppenheimer. He said:

CPI data today is in-line with consensus. Together with the banking crisis, the market believes that the Fed will pause rates earlier than before, and the terminal rate will be lower than previously thought. The likelihood of a rate cut this year has also increased.

Still Be Careful

The jumps in bitcoin have caused various crypto-based stocks – such as Coinbase – to also endure hard rises. DA Davidson analyst Chris Brendler mentioned:

With [bitcoin] spiking in anticipation of a Fed pivot, the recent rally could have legs, but we continue to recommend a conservative approach to this sector… The rapid, unexpected demise of Silvergate, Silicon Valley Bank, and Signature are still rippling through the crypto market, and the level of contagion is hard to predict at this early stage.

Tags: bitcoin, coinbase, Ethereum