Has Bitcoin Benefited From The Banking Crisis? Not the way fans hoped.

Shortly after Silicon Valley Bank failed this month, the price of Bitcoin soared above $25,000, hitting a threshold the digital currency had not touched since June. This week, Bitcoin hit nearly $30,000, up 70 percent for the year.

Bitcoin supporters seized on the price surge to argue that the banking crisis prompted investors to convert traditional currencies into digital coins. One crypto boss the tribute the bank failures as “the end of the USD and the beginning of hyperbitcoinization.” A company that markets Bitcoin to investors started set references to the bank’s race in its advertising material.

But despite the fanfare, there is little evidence that the recent banking collapse has generated widespread support for Bitcoin as a financial alternative.

Instead, the rise in Bitcoin’s price was driven by a series of financial trends that have little to do with the technology’s philosophical underpinnings, analysts said. The reasons for the increase include growing optimism that the Federal Reserve can pause interest rate hikes, as well as growing concerns about the safety of so-called stablecoins, a type of cryptocurrency meant to maintain a price of $1.

“Is there broad interest in and growth coming into the space? Is there a lot of new money?” asked Ed Moya, a cryptoanalyst at trading firm OANDA.- It doesn’t seem like it’s happening.

Bitcoin’s recent rise is also a result of low liquidity, a measure of how easy it is to buy and sell a digital asset without affecting its price, according to an analysis by crypto analytics firm Kaiko. Since the crypto market cratered last year, fewer major financial firms have been buying and selling Bitcoin, making the currency more difficult to trade. Bitcoin’s price has always been volatile, but in today’s market it can increase or decrease significantly after just a few trades. Last week, Bitcoin’s liquidity hit a 10-month low, according to Kaiko.

“It doesn’t mean that because there’s a big price move one way that this is a whole new wave of institutional money or anything like that,” said Conor Ryder, a research analyst for Kaiko. “It’s more of a liquidity problem.”

Bitcoin was created after the 2008 financial crisis, which saw widespread distrust of the banking system. Early proponents trumpeted the new technology as a safer long-term alternative to banks and traditional currencies.

That vision was never realized. Over the past 15 years, traders have largely treated Bitcoin as a speculative investment – and in some cases as a tool for money laundering and other crimes.

But the implosion of Silicon Valley Bank — and the broader crisis it sparked — seemed to lend credence to the original Bitcoin thesis.

“Bitcoin is a clear winner of the US banking crisis,” declared a column for crypto publication CoinDesk this month.

The price of Bitcoin has increased by about 40 percent since the fall of Silicon Valley Bank in early March, rising to $28,000 from $20,000. But that’s still far from Bitcoin’s peak price of nearly $70,000 in November 2021.

And the rise has been fueled in part by problems in other corners of the crypto industry. The banking crisis briefly put billions of dollars in the hands of Circle, one of the largest issuers of stablecoins, and sent investors into a panic. Some crypto traders who have held their digital savings as stablecoins are now looking for other options.

“You see some flows just going out of stablecoins into Bitcoin,” said Mr. Moya, the cryptoanalyst.

The bank has also sparked excitement among crypto investors who were hoping the Federal Reserve would slow its rate hikes to calm panic. Over the past year, the increases have crippled the crypto market by making it more expensive to invest money in speculative assets.

In a widely shared blog post last week, Molly White, a crypto critic, noted that Bitcoin’s price began to rise around the time the government announced it would shut down Silicon Valley Bank — an intervention that some analysts interpreted as a signal that the Fed may take further steps to to calm the situation.

“If the spike was fear-driven, I would have expected it to start during the SVB bank run,” she wrote.

Last week, the Fed announced that it would go ahead with another rate hike. Bitcoin’s price has remained relatively flat since then, hovering around $28,000.

Still, Bitcoin supporters said they sensed an opportunity to recruit new followers.

Swan Bitcoin, a financial services firm that helps people invest in Bitcoin, has seen a surge of new customers looking to buy the digital coin as an alternative to keeping money in the bank, said Cory Klippsten, the company’s CEO.

“They believe that this will be the global reserve currency,” Klippsten said. “This is the best moment for Bitcoin marketing and Bitcoin adoption in its history.”

Cody Candee, CEO of the startup Bounce, got in touch with Swan this month, hoping to convert some of the company’s funds into Bitcoin.

“Having a couple percent in Bitcoin feels like a really great insurance on the US dollar, on the banking system, on the Fed, on the whole infrastructure,” he said.

But Mr. Candee was hesitant to fully commit. Bounce, which operates a network of luggage storage and package pickup locations, raised $12 million in a funding round last year. Mr. Candee said he planned to spend only $200,000 on Bitcoin.

“If it went down significantly,” he said, “it wouldn’t have any impact on the business.”