‘Massive Shock’ – New banking crisis and $300 billion Fed pump have primed Bitcoin after huge crypto and Ethereum price rally
BitcoinBTC has found its feet this year after a rocky 2022 that saw a steep price crash and the emergence of serious regulatory concerns.
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The bitcoin price has climbed to around $28,000 per bitcoin, up from under $17,000 at the start of the year. The combined bitcoin, ethereum and crypto markets have added over $300 billion amid growing expectations of a U-turn from the Federal Reserve and institutional finance giants quietly expanding into crypto.
Now some of the biggest bitcoin, ethereum and crypto bulls are predicting that the ongoing banking crisis that has spread to German giant Deutsche Bank could have primed bitcoin for another breakout.
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“The behavior of [bitcoin] The price through this crisis is going to attract more institutions,” said Cathie Wood of Ark Investment Management Bloomberg this week, along with bullish technical price analysis showing that bitcoin could be headed for around $35,000 per bitcoin.
“The fact that bitcoin moved in a completely different way than the stock markets, in particular, was quite instructive,” added Wood, who has previously said she expects a huge price breakout in bitcoin and ethereum.
The banking crisis that began with the collapse of US Silicon Valley Bank, Signature and Silvergate has spread to Europe, engulfing Credit Suisse and now threatening Deutsche Bank.
Deutsche Bank’s share price fell sharply on Friday, contributing to a crash that has wiped out a fifth of the bank’s market value so far this month.
“The banking crisis, which caused the market to price in interest rate cuts from the summer, has had little spillover effect on crypto (so far),” Macro Hive analysts wrote in an emailed note.
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This week, the Federal Reserve opted for a 25 basis point interest rate hike despite previously increasing its balance sheet by $300 billion to support the banking system.
Expectations have risen in recent weeks that the Fed will be forced to reverse course due to the banking crisis – which some believe could trigger a return to a bitcoin, ethereum and crypto bull market.
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