After a difficult 2022 that saw a sharp price drop and the rise of significant regulatory worries, Bitcoin has found its footing this year.
From the beginning of the year, the price of one bitcoin has increased from under $17,000 to approximately $28,000. The market for bitcoin, ethereum, and other cryptocurrencies as a whole has grown by more than $300 billion as a result of growing hopes that the Federal Reserve will change course and the covert entry of major institutional investors.
Now, some of the most prominent proponents of bitcoin, ethereum, and other cryptocurrencies claim that the ongoing banking crisis that has affected German financial powerhouse Deutsche Bank may have set the stage for a new breakout in the price of bitcoin.
According to Cathie Wood of Ark Investment Management, the behaviour of the [bitcoin] price through this crisis is going to draw more institutions, along with positive technical price analysis that suggests bitcoin could be headed for about $35,000 per bitcoin.
It was pretty instructive that bitcoin moved so differently from the equities markets, in particular, said Wood, who has previously stated that she anticipates a significant price break-out for both bitcoin and ethereum.
The U.S. Silicon Valley Bank, Signature, and Silvergate collapses set off a global financial crisis that has now expanded to Europe, first engulfing Credit Suisse and now posing a threat to Deutsche Bank. The share price of Deutsche Bank plunged significantly on Friday, adding to a slump that has already eliminated a fifth of the bank’s market capitalization this month.
The banking crisis has had little spillover effect on crypto (so far), Macro Hive analysts wrote in an email. The market priced in rate cuts starting in the summer.
The Federal Reserve chose to raise interest rates this week by 25 basis points despite having earlier expanded its balance sheet by $300 billion to support the banking system.
The banking crisis has increased expectations that the Fed would become more dovish, which some believe might lead to a resurgence of the cryptocurrency bull market for bitcoin, ethereum, and other cryptocurrencies.
