3 Reasons Bitcoin Exploded to a 9-Month High This Week

Read full article at CryptoPotato.

Bitcoin soared to a high of $26,514 on Tuesday, up 30% since crashing below $20,000 on Friday.

What caused the king of crypto to rebound in such a spectacular fashion? Here are three possible reasons: 

Silicon Valley Bank’s Bailout

Much of Bitcoin’s price trouble last week stemmed from uncertainty surrounding the crypto industry’s biggest banking partners going bust. Those partners include Silvergate, Signature Bank, and Silicon Valley Bank – the latter of which was seized by the FDIC after a $42 billion bank run on Thursday. 

The event – which both crunched Bitcoin and destabilized USDC – was addressed by the Federal Reserve on Sunday, when it promised to fully bail out all of the bank’s depositors. The announcement was a major relief to a slew of crypto firms with exposure to the bank, including Circle, BlockFi, Ripple, Pantera Capital, and Yuga Labs. 

Notably, the Fed claimed bailouts would come at no expense to the taxpayer – a sign to many that the Federal Reserve plans to inject more money into the economy. In general, more money means higher prices for risk assets – including stocks and crypto. 

Rich Dad Poor Dad author Robert Kiyosaki echoed this thesis after Bitcoin began to rise again on Sunday:

“BAIL OUTS begin. More fake money to invade sick economy. Still recommend the same response. Buy more G, S, BC. Take care. Crash landing ahead.”

Inflation Comes Down

Though Bitcoin was already on the rise after SVB’s rescue, the Bureau of Labor Statistics’ Consumer Price Index (CPI) reading on Tuesday may have helped kick it into overdrive. 

The report showed YoY inflation had cooled to 6% in February – down from 6.4% in January. Meanwhile, Core CPI (which discounts the volatile food and energy price sectors) remained flat at 5.5%. 

The Federal Reserve has been tightening interest rates over the past year to combat rising inflation, which has ravaged both the crypto and stock market alike. Signs that inflation is on the decline may mean that the Federal Reserve is prepared to stop hiking rates, which is bullish for investors. 

CME’s Fedwatch tool shows that over 20% of the market is pricing in a 0% rate hike after this month’s FOMC meeting. 

Binance Goes Long Into Bitcoin

Binance, the world’s largest crypto exchange, may also be behind the pump.

To insulate itself from the woes of stablecoins and the banking system, CEO Changpeng Zhao announced that Binance would convert $1 billion in BUSD from its industry recovery fund into Bitcoin, Ethereum, and BUSD. 

Whales of that size can single-handedly move the market. When the Luna Foundation Guard was purchasing billions of dollars worth of Bitcoin last spring, the organization helped BTC nearly return above $50,000 despite ongoing bear market pressures. 

After his statement, Glassnode data showed tens of thousands of Bitcoin being deposited to Binance. Analyst James V. Straten said this “suggests the reasons for [Bitcoin] volatility on top of macro.”

Bitcoin’s price has since cooled to $24,388 at writing time. 

The post 3 Reasons Bitcoin Exploded to a 9-Month High This Week appeared first on CryptoPotato.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency

Related articles

Price analysis 6/13: BTC, ETH, BNB, ADA, XRP, SOL, DOGE, DOT, LEO, AVAX

Read full article at Cointelegraph.com News.The United States equities markets extended their decline to start the week on June 13. The S&P 500 hit a new year-to-date low and dipped into bear market territory, falling more than 20% from its all-time high made on Jan. 4.  The cryptocurrency markets are tracking the equities markets lower […]

Learn More

How Much Risk Can You Stand?

Read full article at The Capital. Our Choices Determine How Much We Make Or Lose As Investors Continue reading on The Capital » ShareTweetFollow usSaveThis article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, […]

Learn More

SushiSwap passes 100% fee relocation, 10.9M SUSHI clawback proposals

Read full article at Cointelegraph.com News. According to a governance proposal passed on Jan. 23, decentralized exchange (DEX) SushiSwap will soon redirect 100% of trading fees on the platform to its treasury for operations and maintenance for one year’s duration. The move came after CEO Jared Grey warned that the exchange “only has 1.5 years […]

Learn More
Facebook
Facebook
LinkedIn
LinkedIn