Bitcoin made a significant leap during US trading hours, with investors considering the ongoing banking unrest and expressing renewed interest in cryptocurrencies as well as other valuable assets. The leading cryptocurrency by market capitalization experienced a 2.6% increase over the last 24 hours, trading at around $28,775. This surge in BTC prices followed a fall in shares of two regional banks, PacWest Bancorp (PACW) and Western Alliance Bank (WAL), by 27% and 15% respectively.
Cryptocurrency markets appeared to benefit from the recent collapse of four US banks, including First Republic. However, weaker than expected labor data has raised concerns about the strength of the economy and whether inflationary pressures might ease – a situation that could further support digital assets.
Ether, the second-largest cryptocurrency by market capitalization, experienced a similar increase, rising 2.5% to around $1,877. The CoinDesk Market Index, which measures the overall crypto market performance, observed an increment of over 2% on the day.
In contrast, equities registered a decline, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all dropping by approximately 1%. Furthermore, bond markets experienced falling yields; the 2-year Treasury note witnessed a fall of 16 basis points to 3.94%, while the 10-year Treasury note saw a drop by roughly 14 basis points to 3.42%.
A recent survey by CoinShares revealed that a substantial 64% of investors believe the Federal Reserve has made a policy error, while 22% express concern that a mistake could be made in the near future. Despite a series of regulatory actions during Q1, digital asset weighting in portfolios has increased from 0.7% to around 1.6%.
The survey also indicated that Ethereum remains a favored asset, with little change when compared to the previous January survey. However, should the economy continue to weaken, Ethereum could underperform, as stated by Greg Magadini, director of derivatives at crypto analytics firm Amberdata. Magadini even suggested that a potential recession could lead to the Federal Reserve cutting rates later this year, benefiting Gold and Bitcoin.
Market analysts believe that Bitcoin and Ethereum offer the most attractive growth outlooks, with lesser appetite directed towards altcoins. Furthermore, Magadini asserted that Bitcoin should continue to outperform other cryptocurrencies and increase its share in the market. As banking uncertainties loom, the crypto market may become an increasingly appealing investment opportunity that witnesses continued growth in market shares, capitalization, and broader adoption.
Source: Coindesk
