Bitcoin rises 32% this week as banking crisis spreads
Just as a group of big US banks decided to bail out yet another regional bank, just as the fate of Credit Suisse seems uncertain, just as more and more banks are borrowing money from the Federal Reserve, Bitcoin is doing exactly what it was designed to do.
21 million Bitcoins and no more – this notion assures investors that the coin cannot be diluted. The value of the largest digital currency rose to $27,500, the highest level since June 2022. All this during a financial crisis that does not seem fully under control.
BREAKING: #Bitcoin surpasses $27,000 for the first time since June, 2022.— Watcher.Guru (@WatcherGuru) March 17, 2023
First Republic bank
The problems in the global banking sector are clearly not over. First there was Silvergate, then Silicon Valley Bank and then Signature Bank, all in the United States. This was followed by panic around the Swiss banking giant Credit Suisse, which caused a storm in Europe as well.
After the Swiss central bank extended a credit line of 50 billion Swiss francs, the worst seemed over, until we were told on Friday morning that a group of 11 US major banks (including JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs) had placed some $30 billion in deposits with First Republic bank in order to prevent another bank run.
Bitcoin continues climbing
Cathie Wood, founder of the Ark Investment fund, noted earlier this week that Bitcoin never ran into trouble during the week-long banking crisis. Classic media may say that crypto banks are at the origin of this, but as from the moment that Credit Suisse also got into trouble, that argument was of course no longer applicable.
CATHIE WOOD: #Bitcoin "didn’t skip a beat" while the U.S. banks were collapsing. 💪 pic.twitter.com/X6TUtuNLOW— Bitcoin Archive (@BTC_Archive) March 15, 2023
Wood said the Fed’s rate hikes was what got the banks into trouble, not crypto.
“Bitcoin itself is a hyped-up fraud...decentralized Ponzi scheme…It’s a pet rock.” - Jamie Dimon— Dan Held (@danheld) January 19, 2023
Ok boomer. pic.twitter.com/MXY1HDXInz
Meanwhile, Bitcoin surged to its highest level of the year at $27,500. Jamie Dimon, CEO of JP Morgan, called Bitcoin a “pet rock” (an American expression that refers to something without value) earlier this year, but it seems more and more investors understand why Bitcoin’s scarcity will lead to growth over time.
VadimVasenin / Depositphotos.com