Why Is Bitcoin Going Up? – Forbes Advisor INDIA

Why Is Bitcoin Going Up Today?

The price of Bitcoin (BTC) has risen in recent days, breaking through the psychologically significant $30,000 (INR 24,74,493) level for the first time since June 2022.

Bitcoin’s value has been on a wild ride over the past month, thanks to the banking crisis that saw three U.S. banks fail, with the Federal Reserve launching an emergency lending programme to stem the panic.

While this seems to have proved a success, Bitcoin’s recent rise is attributed to sustained fears about wider troubles in the global banking sector.

Cryptocurrencies tend to benefit when investor sentiment regarding traditional banks turns negative.

At one point in March, Bitcoin fell over 10% in just a week. However, the price has since increased by over 40% in the past month as traders regain confidence.

Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalisation, has followed a similar trajectory over the last month, and is currently trading at its highest level since November 2022.

Bitcoin Crosses $30,000 In April 2023 for the First Time Since June 2022

Bitcoin has risen in value in April, reaching $30,000 (INR 24,74,493) today, according to CoinMarketCap. It’s up 6.42% on yesterday’s figure of $28,165, and up 46.81% on one month ago.

As well as the reduced prospect of banking sector turmoil, investors have been encouraged by the possible reversal of the Fed’s interest rate hikes, which puts downward pressure on risky assets such as cryptocurrency.

USDC Coin Regains Its Peg

In other important crypto news, Circle’s USDC coin regained its dollar peg after losing the important benchmark following Silicon Valley Bank’s announcement.

The fear among investors was that Circle kept a portion of its funds invested in the FDIC-backed bank. Afraid that the stablecoin issuer may not have the reserves to fund its obligations any longer, there was a slight run on the coin.

As USDC fell to around $0.86 per coin, crypto exchange Coinbase even halted trading on the coin to try and stem the losses while maintaining an all-important $1.00 peg.

However, following the announcement by U.S. authorities that the FDIC would be backing all of Silicon Valley Bank’s obligations, USDC regained its peg.

What Does Bitcoin’s Bounce Mean for Investors?

The big question facing investors is whether this is yet another sign that Bitcoin has reached the bottom or if the refuge is merely a dead cat bounce, where prices temporarily rebound amid a longer-term negative trend, only to resume the downward fall after that.

While the bounce has provided a welcome reprieve, the reality is that we are in an unprecedented territory regarding the geopolitical climate, rampant inflation and the Fed’s stance on interest rates.

Anyone familiar with the industry knows that even at the best of times, predicting the short-term price action of digital assets is near impossible. That holds particularly true in this market environment.