Bitcoin prices rise above $26,000 amid banking crisis, Fed interest rate outlook
Yahoo Finance crypto reporter David Hollerith joins the Live show to discuss bitcoin’s rally to its highest levels since June, what the upcoming Fed meeting could mean for cryptocurrencies, and a report Coinbase is exploring an alternative location with customers overseas.
Video transcription
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SEANA SMITH: Alright, crypto resumes rally, Bitcoin climbs above $26,000 for second time this week. We’re headed for the best week we’ve seen in a little over two years. We want to bring in David Hollerith to break down the action we’ve seen. And David, it seems investors are moving into crypto at a time when there is so much uncertainty.
DAVID HOLLERITH: Yes, Sean. I mean, we saw Bitcoin start to rise a lot yesterday. And this was at the time, you know, where the banking system – the American banking system – or yes, got a kind of infusion that we saw with the First Republic. And it’s hard to ever figure out what drives the Bitcoin price. But it has continued that rally into today. And Bitcoin has hit new price highs, or sort of in the last couple of weeks. Obviously the end of last year was pretty rough for it.
That said, when the Silicon Valley Bank seizure happened exactly one week ago, we saw it plunged into uncertainty about how it might affect the market. And the industry in the US has had its two major banking partners close. So now at this point it’s at a very interesting time as stocks are also rising, especially technology stocks. So that’s it. And there’s a lot of — there’s kind of a growing camp of people who are looking at what’s going on in the U.S. banking system and trying to predict what the Fed might do from here on out. So that’s in play too.
But overall, this is a very interesting time to consider Bitcoin as it was created, at least arguably, during the financial crisis of 2007 to 2009, and during that period, I mean, the idea was to create a currency and banking solution that was beyond the reach of governments. And that’s obviously an interesting thing here because you can look at how Bitcoin might have benefited from the government stepping in to stop some of these banks in a certain way if you just track it with the price. So it’s a very interesting time.
I mean, I think what you have to take into account is that Bitcoin is – right now it’s 46% of the total crypto market. And it hasn’t hit that high since June 2022. And during that time, crypto sort of dealt with its own credit crunch. And it was seen as an escape to safety. And at this point, investors don’t seem as scared. But it seems that Bitcoin collects much more than the other coins.
SEANA SMITH: And Dave, crypto-related stocks – Coinbase is reportedly in talks with clients about a new overseas venue. What is the meaning behind this potential move?
DAVID HOLLERITH: Yes, using three unnamed sources, Bloomberg released the story today. And this is basically that institutional clients were said to be approached by Coinbase to potentially do what we would consider in the US to be an offshore trading venue. An international expansion for Coinbase has been something they have been doing for years. Like Robinhood, for example, which is trying to launch in the UK by the end of the year, they have committed. These companies, their mission is, in so many words, to democratize finance.
And that’s really only achieved by traveling all over the world, especially in places where banking services or local currencies don’t hit the mark as much. But Coinbase is clearly dealing with a few other things. It is already in 100 countries. So this is different in that they’re talking about actually creating another operating unit, what it sounds like from the information that we have. Obviously, that hasn’t really been extrapolated to us by Coinbase. They have refused to comment. But we will be aware of this, especially in light of the fact that US regulatory crypto legislation has not really been moved forward, and it has developed in other countries such as in Europe and Asia.
SEANA SMITH: Coinbase is up 12% right now, up 43% in the last five days. David Hollerith, thank you so much for joining us.
