ΞΑΝΑ ΠΑΝΩ ΑΠΟ ΤΟ ΕΠΙΠΕΔΟ ΤΩΝ 28.000 ΔΟΛΑΡΙΩΝ
- 30 Apr 2023
- economy
Bitcoin rose 5% yesterday to reach $28,474, re-crossing the $28,000 level after falling below it on Monday.
Investors appeared to shrug off anxiety surrounding a regulatory crackdown on cryptocurrencies in the US after the CFTC sued Binance for alleged violations of trading rules, according to CNBC.
"Crazy increase" in 2023
Markets are also betting that the US Federal Reserve will reverse course on raising interest rates later this year.
Bitcoin is up 50% so far in 2023, outperforming major commodities and stock indexes.
The most popular crypto rose sharply on Wednesday as investors shrugged off initial fears of US regulatory crackdowns on industry giants and became willing to take some risk.
Bitcoin has been steadily rising this year after a “bad” 2022 that saw major crypto exchanges collapse and prices plummet. Investors have been comforted by the thought of a reversal in the US Federal Reserve's rate hike moves, which are putting pressure on risk assets such as stocks.
The reason for the jump Wednesday was not immediately clear. However, it comes amid broad gains in US stocks. Bitcoin is known to track movements in equity markets, with investors treating it more like a traditional risk asset.
Nasdaq futures were up 100 points, or 0.9%, on Wednesday morning.
Repression
US regulators have stepped up their crackdown on crypto firms lately, with the CFTC suing Binance and its co-founder Changpeng Zhao for allegedly violating trading rules by "wooing" customers in the US without authorization.
The Securities and Exchange Commission has also threatened to take legal action against Coinbase for alleged violations of securities rules.
"Overall we are quite bullish on Bitcoin retrieving $28,000 and targeting $30,000 thereafter," Vijay Ayyar, Luno's global head of crypto, told CNBC via email on Wednesday.
“Generally, when price action starts to absorb negative news so quickly, it indicates that the market is trending up. The CFTC case against Binance, although quite significant, does not seem to have affected the market that much,” he added.
Push from the banking system
Bitcoin had earlier received a boost from the woes in the global banking system. Swiss banking giant Credit Suisse was recently rescued by peer UBS
US technology-focused lender Silicon Valley Bank and crypto-oriented banks Silvergate and Signature have also gone bankrupt.
The Federal Reserve has sought to soften the blow of the banking crisis with a lending program known as the Bank Funding Program, or BTFP, which aims to help banks meet their obligations to depositors.
Proponents of bitcoin say it can serve as a store of value in times of economic distress and as a form of money that people can access without the need for a bank account.
"With the bank failure last month and the rise of Bitcoin, this provides the perfect context for Bitcoin to continue to remain bullish and move higher," Ayyar said.
