Bitcoin, the world’s largest cryptocurrency, surged past $28,000 to hit a nine-month high, as investors flocked to cryptocurrencies as alternative assets amid concerns about the banking crisis.
The price of Bitcoin rebounded by 0.89% to $28,124.12 this morning. The cryptocurrency was boosted by expectations that the US Federal Reserve (Fed) would slow down on raising interest rates, while the US banking sector faces volatility.
The market expects the Fed to raise interest rates by 0.25% at its meeting tomorrow and will cut interest rates in the middle of this year, which is faster than previously expected. This news has provided a boost to Bitcoin, which is seen as a hedge against inflation and government monetary policies.
Bitcoin is up nearly 70% since the start of 2023, after plunging 65% in 2022 to below $16,000 in November, following the news of the bankruptcy of FTX, the world’s second-largest cryptocurrency trading platform.
Bitcoin used to surpass $69,000 in November 2021, which is the highest level in history, before sinking below $20,000 in June 2022 amid concerns that the Fed’s acceleration in raising interest rates and shrinking its balance sheet would drag down liquidity in the market and make the United States face a recession.
The recent surge in Bitcoin provides a positive outlook for the cryptocurrency market and shows that investors are regaining confidence in digital assets after a challenging period of market uncertainty.