HONG KONG/LONDON: As investors turn to digital assets in response to the financial sector’s crisis, bitcoin surged to a nine-month high on Monday, building on its greatest week in four years.
In line with growing forecasts that central banks will limit the rate of interest rate increases, the largest cryptocurrency increased as far as $28,567, its highest level since mid-June, and was last up 0.9%.
Bitcoin increased by 26% last week, marking its highest weekly gain since April 2019, and it has increased by 40% in the last 10 days as a result of the global financial crisis, which so far has culminated in UBS Group’s acquisition of rival Credit Suisse Group AG over the weekend.
After UBS completed its state-backed acquisition of Credit Suisse on Monday, a deal designed to rebuild trust in a battered sector, traditional assets like banking equities and bonds plunged.
Leading central banks took action on Sunday to increase the flow of money throughout the world in response to the threat of a swift decline in trust in the soundness of the financial system. Since the peak of the COVID-19 pandemic, there hasn’t been such a widespread response.
According to Tony Sycamore, an analyst at IG Markets, “Its amazing gain is the result of the financial crisis, and as the interest rate markets prices in rate cuts in the second half of 2023,” expecting a move above $32,000 should bitcoin stay above the crucial support level of roughly $25,000.
Several market participants projected that central banks’ initiatives to increase liquidity in the global financial system would be advantageous for bitcoin. As significant monetary and fiscal stimulus measures were implemented by central banks and governments in November 2021, it reached a record high of $69,000.
At Singapore-based digital asset company Matrixport, Markus Thielson claimed that liquidity was the source of all of the impetus.