Bitcoin has broken a roof again. This Friday, the quintessential cryptocurrency exceeded $27,000, a figure that it had not reached for nine months, when its price plummeted after the collapse of Terra and Luna. It has done so just a week after the closure of Silvergate, a financial institution crypto, which was linked to the collapse of Silicon Valley Bank. That It was a major setback for this virtual currency, which lost the floor of the 20,000 dollars. Despite the fact that the fear of a major banking disaster has not disappeared, its market price has not only skyrocketed, but its value has skyrocketed by 35%.
That figure has made many wonder if bitcoin has returned to its own course. Last year, the correlation between the price of cryptocurrencies and the S&P 500 index reached all-time highs. This is what explains why a large part of the large falls in cryptocurrencies have been preceded by increases in interest rates —that is, the increase in the cost of debts— announced by the Federal Reserve (FED) of the United States, so that their price was conditioned by macroeconomic movements.
William Cid
“The main reason for the rise these days is that many investors now anticipate that the Federal Reserve will be less aggressive raising interest rates to contain inflation,” explains Saul Hudson, director of Angle42, a communications and marketing consultancy specializing in this industry. “Some banks had problems when they raised rates, so people assume that the Federal Reserve will be reluctant to risk causing more problems for banks by sticking to their rate plans.”
For now, the European Central Bank has raised interest rates by 0.5 points, which already reach 3.5%, thus prioritizing inflation control over what happened in the banking crisis. While it is true that its influence on cryptocurrencies is hardly remarkable, it is also true that it can anticipate what the Federal Reserve does. “Both central banks They don’t usually move in the opposite direction., but that they can (or rather usually) be pronounced at different times. Hence these movements, which are waiting for what the FED will do after seeing the ECB’s announcement,” says Fernando Castelló Sirvent, economist and professor at ESIC.
In any case, bitcoin’s rebound these days is not only noticeable in its price, but also in that is concentrating more share within cryptocurrencies. In fact, it is already very close to 50% of the 1.1 trillion that these currencies move. It is something that has not happened since last summer, when both its maximum of 68,000 dollars and its last ceiling of presence in the sector coincided. Among other reasons, it is due to the massive sales of stablecoinsthe result of pressure from US regulators, which has increased in recent weeks.
“Bitcoin has been the beneficiary”, points out Hudson, from Angle42, which is why he considers that there are those who have once again seen this currency as a store of value. “All of this drives quality within cryptocurrencies, and once again bitcoin benefits as investors shift some of their investments in other currencies towards the No. 1 asset in the class, which has proven its resilience for more than a decade”, says this specialist.
:format(jpg)/f.elconfidencial.com%2Foriginal%2F3ae%2F6c4%2F5dc%2F3ae6c45dc32119a37121193b0511464f.jpg)
Mario Escribano Graphics: Data Unit
“The problems in the traditional banking sector have shown that keeping money in banks also carries some risk,” continues Hudson, while recalling that “now it seems investors less likely to make as much money as they expected with interest rates.” However, after the fall of Silicon Valley Bank, Bitcoin chained a series of falls and did not take flight until the US announced its package of measures to avoid the collapse.
In any case, there is some investigations that point to bitcoin, actually, has always kept its own course. It is the case of the report The Bitcoin–Macro Disconnectpublished by the New York Federal Reserve, where it is emphasized that this currency is “an asset without intrinsic value for which its current price depends on the price it is expected to have in the future.”
“The result of bitcoin not reacting to monetary news it is disconcertingsince it casts some doubts on the role of interest rates in setting its price”, acknowledge the authors, who warn that they used a small sample for the study. “It is something that opens up new research possibilities, because it that they indicate is new, but it must be expanded with other methods”, comments Castelló Sirvent.
Either way, not seeing much of a disconnect between traditional finance and cryptocurrency these days, but rather have followed similar trajectories. However, as has happened on previous occasions, the behavior of digital currencies is usually much more aggressive than that of the stock markets, both for falls and for rises.
In addition, uncertainty is far from having disappeared from this sector. In the last weeks, The US has hardened its stance on cryptocurrencies and some of the mechanisms that they usually use, such as deposit systems, something that has made many fear a regulation that would leave this business on the brink of infeasibility.
Bitcoin has broken a roof again. This Friday, the quintessential cryptocurrency exceeded $27,000, a figure that it had not reached for nine months, when its price plummeted after the collapse of Terra and Luna. It has done so just a week after the closure of Silvergate, a financial institution crypto, which was linked to the collapse of Silicon Valley Bank. That It was a major setback for this virtual currency, which lost the floor of the 20,000 dollars. Despite the fact that the fear of a major banking disaster has not disappeared, its market price has not only skyrocketed, but its value has skyrocketed by 35%.
