More than 80% of the value of the most widely used cryptocurrency has been gained since the beginning of 2023.
As investors became increasingly hopeful about the United States Central Bank’s monetary policies, the price of Bitcoin (BTC) climbed beyond $30,000. This was the first time it has done so since June 10, 2022.
Recent trade of the largest cryptocurrency by market capitalization showed a price of $30,237, an increase of 6.75 percent from the previous day.
According to Banxa’s U.S. CEO and chief legal officer, “it’s clear that the market is pricing a slowdown in growth, and in turn a loosening of monetary policy by the Federal Reserve over the course of 2023.” Banxa is a payment and compliance infrastructure provider for cryptocurrencies. “One need only examine the bond market as proof of this.”
The two-year U.S. Treasury note dropped to around 4% from above 5% in early March, as traders abruptly reversed their forecasts of future interest rate hikes from the Federal Reserve.
“There will likely still be a lot of liquidity injected into the market as a result,” Mico said. Bitcoin has already outperformed all other assets in 2023. It is also the type of asset that tends to react most rapidly and dramatically to changes in the value of the currency.
The last time Bitcoin’s price was higher than $30,000 was on June 10; by late 2022 and early 2023, it had dropped to under $20,000. For the past three weeks, it has been stuck around $28,000 as investors assess the long-term effects of a near banking catastrophe, persistent inflationary pressures, and other macroeconomic risks. After beginning the year around $16,600, Bitcoin has increased by almost 80% so far.
Inflation seemed to be easing in January, which boosted the value of the cryptocurrency. When the Silicon Valley and Signature banks collapsed in February, some investors began to question the soundness of the current monetary system and regained their desire for assets that keep their value. This led to a resurgence in Bitcoin’s price in late March. For the first time since 2020, the price of gold has risen beyond $2,000.
Mico observed that the banking crisis is adding to bitcoin’s momentum, which is causing a shift in the story’s focus. On the other hand, “BTC is also being seen as a reliable store of value that lacks the issues that come with storing your money by way of a third-party intermediary, or a bank,” he continued. In recent times, “BTC is now properly starting to be perceived as a risk-off asset.”
According to Mico’s analysis, “de-dollarization is also becoming part of the narrative,” which is “further accelerating BTC adoption.” You can effectively act as your own bank while using Bitcoin. Volatility of late makes projections tricky, but I wouldn’t be shocked if BTC’s recent upswing continues.
Co-founder of Sologenic, a blockchain-powered network for tokenizing securities, Bob Ras, said to CoinDesk that bitcoin’s decoupling from stocks demonstrated “its increasing appeal as a safe haven for investors.”
When Ras wrote that “while the 2020-2021 period was perceived as Bitcoin’s breakthrough moment, the present time truly marks its ascendance onto the global stage as a formidable asset,” he meant that Bitcoin had reached a new level of prominence. “Bitcoin has emerged as the reliable sanctuary that many had anticipated amid increased global instability, collapsing banking institutions, and rising concerns regarding reserve currencies. At this juncture, the digital asset industry has made a significant step forward.
