Bitcoin climbs to 9-month high as banking crisis increases
The biggest cryptocurrency rose as high as $28,567, its highest since mid-June, and was last up 0.9%, amid growing expectations that central banks would slow the pace of rate hikes.
Bitcoin climbed to a nine-month high on Monday as turmoil in the banking sector prompts some investors to turn to digital assets, as the cryptocurrency built on its best week in four years.
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The biggest cryptocurrency rose as high as $28,567, its highest since mid-June, and was last up 0.9%, amid growing expectations that central banks would slow the pace of rate hikes.
Bitcoin surged 26% last week, its best weekly gain since April 2019, and has surged 40% in 10 days as turmoil in the banking sector rippled around the globe – culminating so far with UBS Group’s takeover of rival Credit Suisse Group AG over the weekend.
Traditional assets such as bank stocks and bonds fell on Monday after UBS sealed its state-backed takeover of Credit Suisse, a deal orchestrated in a bid to restore confidence in a distressed sector.
Top central banks, facing the risk of a rapid loss of confidence in the stability of the financial system, moved on Sunday to strengthen the flow of cash around the world. Such a global response has not been seen since the height of the COVID-19 pandemic.
“The stunning rally is a result of the banking crisis and as interest rate markets price in rate cuts in the second half of 2023,” said Tony Sycamore, analyst at IG Markets, predicting a move towards $32,000 should bitcoin hold above key support levels around $25,000.
Other market participants predicted that bitcoin would benefit from the central bank’s efforts to boost liquidity in the global financial system. It rose to a record $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.
“The momentum is all driven by liquidity,” said Markus Thielson at digital asset firm Matrixport in Singapore.
