According to an analyst, the reason for the hour-long surge in bitcoin was difficult to pinpoint, but it could be attributed to the increased optimism among investors after last month’s banking crisis. Despite the fact that large parts of the world were celebrating Easter Monday, the cryptocurrency appeared to be heading towards a promised land above $30,000. The largest cryptocurrency by market capitalization had been hovering around $28,000 since mid-March when fears about the conventional banking system began to diminish. However, it surged to $29,744 in the afternoon, its highest level since early June, due to an increase in investor optimism. Currently, it is trading at $29,616.
Bitcoin rose nearly 4% between 10 a.m to 11 a.m. ET (14:00-15:00 UTC). The cause of the move was challenging to identify, but it occurred around the same time as the release of news that Federal Home Loan Bank debt issuance had lessened, signaling that the banking crisis was easing. Ether (ETH) also experienced a surge, crossing the $1,900 level before retracting, and was up about 1.7% compared to 24 hours earlier. Other major cryptocurrencies were largely in the green.
Equity indexes closed roughly flat, with the S&P 500 and Dow Jones Industrial Average rising slightly, while the tech-heavy Nasdaq Composite lost 0.03%. Crypto-related stocks enjoyed a memorable day, with crypto exchange Coinbase (COIN) and corporate bitcoin vault MicroStrategy (MSTR) both rising more than 7.5%.
Investors will be paying close attention to the March Consumer Price March Index (CPI) report for signs that inflation is continuing its recent trudge downward. In February, inflation in the United States slowed to 0.4% from 0.5% a month earlier and 6% on a yearly basis from 6.4% the previous month. Following that report on March 14, bitcoin surpassed $26,000. If inflation continues to slow down, central bankers may be emboldened to scale back their year-long regime of harsh interest rate hikes, although the impact on bitcoin is uncertain.
The crypto seemed to gain momentum following the recent U.S. bank failures that caused worries about the conventional financial system, as investors shifted towards assets that retain value through good times and bad. Investors will also be weighing the first wave of quarterly earnings with banking giants JPMorgan Chase, Wells Fargo, and Citigroup scheduled to report results. Analysts are expecting a largely downcast quarter, particularly in the hard-hit financial services sector.
Joe DiPasquale, the CEO of crypto fund manager BitBull Capital, was cautiously optimistic about the sustainability of bitcoin’s Monday surge.
