Bitcoin price rises to 9-month high after Credit Suisse takeover of UBS

• Bitcoin hit a nine-month high before reversing on Monday amid fears of an ongoing banking crisis.
• Credit Suisse was acquired by UBS in a deal essentially forced by the Swiss government.
• Amid a series of bank failures, bitcoin’s attributes take center stage as bulls talk about the benefits of a decentralized currency.

Bitcoin rose as much as 4% on Monday amid fears of an ongoing banking crisis that started with the collapse of Silicon Valley Bank earlier this month and has now led to the takeover of Credit Suisse by UBS.

The price hit a nine-month high in early trade, approaching the $30,000 mark that is set to represent a key resistance level as traders assess whether the banking crisis will spread or is fully under control. Bitcoin later gave up gains and turned negative.

Still, it appears the decentralized cryptocurrency has finally found its time to shine as many of its long-touted attributes are front and center in a race against banks and interventions by governments and central banks to instill confidence in global finance.

The abrupt FDIC takeover of Silicon Valley Bank highlighted this dynamic, and it was on full display again this weekend after the Swiss government essentially forced UBS to buy Credit Suisse for just over $3 billion, while the government changed the law so that shareholders was not required to vote on and approve the agreement.

The deal also wiped out $17 billion of additional Tier 1 bondholders in an unprecedented move, given that equity holders were not completely wiped out in the deal.

Since the FDIC took over Silicon Valley Bank on March 10, bitcoin has rallied 42% and is up 63% from its mid-November low of around $15,500.

“The strengthening correlation between bitcoin and gold, combined with the ongoing banking crisis, suggests that some investors may be turning to bitcoin as an alternative investment,” Fundstrat’s head of digital assets Sean Farrell said on Friday.

Fundstrat’s Tom Lee said bitcoin’s strong performance so far in 2023 is a testament to its “outright resilience,” especially when you consider the recent failures of FTX, Signature Bank and Silvergate Capital.

“Despite bitcoin seeing accelerated gains. If this doesn’t speak to the protocol’s resilience, I’m not sure what does,” Lee said Monday. He advised investors to stay overweight on the cryptocurrency.

But Fairlead Strategies’ Katie Stockton is waiting for more signs of support above the $25,000 level before becoming more bullish on bitcoin.

“A breakout would require consecutive weekly ‘closes’ above resistance and would complete a base phase in a bullish long-term trend. Next resistance is a nearby $27,300 to $28,200 zone… We will await confirmation before assuming a more bullish bias, ” Stockton told Insider on Friday.