LONDON:
Bitcoin hit a nine-month high on Tuesday, taking gains past 30% in four days as it shrugged off chaos in global markets after last week’s collapse of Silicon Valley Bank and rode expectations that US interest rates won’t rise so fast.
Bitcoin jumped as much as 9.6% to $26,533, its highest since June 2022, in its fourth straight days of gains.
Major cryptocurrencies have been buoyed in recent days by US authorities announcing plans to limit the fallout from the collapse of Silicon Valley Bank (SVB).
US authorities’ action helped stabilise the major USDC stablecoin, whose issuer Circle had deposits of $3.3 billion at SVB. The steadying of USDC, the second-biggest stablecoin and a key cog in digital token trading, was seen as positive for the crypto sector as a whole.
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Bitcoin, the largest cryptocurrency, has taken in its stride the collapses of SVB and Signature Bank over the weekend, and Silvergate Bank earlier this month, all key banking partners for a number of crypto firms.
Helping the asset on Tuesday, analysts said, was US consumer price data that showed inflation still rising, but at a slower pace than the previous month. The widely anticipated reading may lead the Federal Reserve to slow or even pause hiking interest rates next week.
“CPI data being in line with expectations has been very supportive for interest rate sensitive crypto assets such as bitcoin,” said James Butterfill, head of research at digital asset manager CoinShares.
Other factors have also helped bitcoin, said Richard Usher, head of over-the-counter trading at London crypto firm BCB Group, citing a move by the Binance exchange to convert its $1 billion industry recovery fund to tokens including bitcoin.
Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency.
— CZ 🔶 Binance (@cz_binance) March 13, 2023
“With CPI falling in line with expectations today and the recent fall in global yields signalling that interest rate hikes may be pared back, we have broken $25,000 with $28,000 the first target,” said Usher.
