Bitcoin tops $30,000 for first time in 10 months | Business news

The banking crisis in March has strengthened the belief among some that cryptocurrencies are an attractive alternative to traditional finance.

Cryptocurrency Bitcoin has hit a 10-month high following the worst banking crisis since the 2008 global financial crash and is now worth more than $30,000.

One Bitcoin was worth $30,438 in Asian trading on Tuesday, a high not seen since last June – but still less than half of its all-time high of more than $67,000 in November 2021.

The value of the major cryptocurrency has recovered from the hits it took late last year as one of the world’s largest cryptocurrency exchanges, FTX, went bankrupt and its founder Sam Bankman-Fried our charged with fraud.

The leading cryptocurrency had risen steadily in value since March, tipping the $30,000 threshold amid expectations that the U.S. central bank, known as the Fed, will halt its interest rate hikes, thereby maintaining borrowing costs as opposed to making lending more expensive.

Fed had been increasing interest rates in an attempt to bring the stubborn high inflation down.

However, the market’s expectations now are that the Fed is unlikely to raise interest rates much higher for a longer period of time, as it tries to minimize stress on the banking sector.

More than a quarter of economic forecasters (28.6%) expect no increase in US interest rates next month, while the remaining 71.4% predict a 0.25 percentage point increase.

High interest rates created problems for the banks and were one of the factors behind it collapse of Silicon Valley Bank and the accompanying worst banking crisis since the global financial crash of 2008. US lenders Signature Bank and Silvergate Bank collapsed, and Switzerland’s second largest lender Credit Suisse was forcibly taken over of Swiss rival UBS.

However, high interest rates also contribute to banks’ profitability. NatWest, for example, had profits rise to highest level since before the global financial crash as money earned on loans, minus the amount it pays in interest, increased.

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Bitcoin value had increased since the FTX collapse, but particularly strengthened during March following the collapse of three US banks.

The turmoil gave new credence to the belief among Bitcoin fans that cryptocurrency is a more attractive alternative to traditional finance.