Why is Bitcoin going up? – Forbes Advisor INDIA

Why Is Bitcoin Rising Today?

The price of Bitcoin (BTC) has risen in recent days, breaking through the psychologically significant level of $30,000 (INR 24,74,493) for the first time since June 2022.

Bitcoin’s value has been on a wild ride over the past month, thanks to the banking crisis that saw three US banks fail, with the Federal Reserve launching an emergency lending program to stem the panic.

While this appears to have proven to be a success, Bitcoin’s recent rise is attributed to persistent fears of larger problems in the global banking sector.

Cryptocurrencies tend to benefit when investor sentiment regarding traditional banks turns negative.

At one point in March, Bitcoin fell over 10% in just one week. However, the price has since rallied by over 40% in the past month as traders regain confidence.

Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, has followed a similar trajectory over the past month, and is currently trading at its highest level since November 2022.

Bitcoin crosses $30,000 in April 2023 for the first time since June 2022

Bitcoin has surged in value in April, reaching $30,000 (INR 24,74,493) today, according to CoinMarketCap. That’s up 6.42% from yesterday’s figure of $28,165, and up 46.81% from a month ago.

In addition to the reduced outlook for banking sector turmoil, investors have been encouraged by the possible reversal of the Fed’s rate hikes, putting downward pressure on risky assets such as cryptocurrency.

The USDC coin regains its peg

In other key crypto news, Circle’s USDC coin regained its dollar peg after losing the key benchmark following Silicon Valley Bank’s announcement.

The fear among investors was that Circle kept a portion of the funds invested in the FDIC-backed bank. Fearing that the stablecoin issuer may not have the reserves to finance its obligations anymore, there was a small run on the coin.

As USDC fell to around $0.86 per coin, crypto exchange Coinbase even halted trading of the coin to try to stem the losses while maintaining an important peg of $1.00.

Following the announcement by the US government that the FDIC would support all of Silicon Valley Bank’s obligations, the USDC regained the bond.

What Does Bitcoin’s Bounce Mean for Investors?

The big question facing investors is whether this is yet another sign that Bitcoin has bottomed, or whether the refuge is just a dead cat bounce, where prices temporarily rally in the middle of a long-term negative trend, only to resume the downward trend the fall after that.

While the rebound has provided a welcome respite, the reality is that we are in unprecedented territory in terms of the geopolitical climate, rampant inflation and the Fed’s stance on interest rates.

Anyone familiar with the industry knows that even at the best of times, it is nearly impossible to predict the short-term price action of digital assets. That is especially true in this market environment.