Image: Reuters
The cryptocurrency Bitcoin has recovered significantly in the wake of the recent turmoil in the banking sector. The price of the most important cryptocurrency reached the $30,000 threshold on Tuesday – for the first time since June 2022. In addition to the banking crisis, experts also blamed the possibly approaching end of interest rate hikes by the US Federal Reserve for the rise. The banking sector was reeling, particularly with the collapse of California’s Silicon Valley Bank in March. Some Bitcoin proponents see cryptocurrencies as an alternative to the banking sector – and felt vindicated by the banks’ problems.
The demand for cryptocurrencies is also fueled by the fact that the Fed may not be able to hike interest rates further. The crypto sector had benefited from the very low interest rates, especially during the corona pandemic. This made risky investments like Bitcoin more interesting.
However, since cryptocurrency trading platform FTX went bankrupt in November, the entire sector has lost massively in value. The bitcoin price remains far from its all-time high: it was close to $70,000 in November 2021.
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