Why Is Bitcoin Price Going Up?
Bitcoin (BTC), the largest cryptocurrency by market cap, is enjoying a comeback rally despite the looming crisis in the global banking sector. Following a roller-coaster year in 2022, the price of Bitcoin has experienced even more volatility entering into the new year — from going as low as 19K to rallying all the way up to $26K.
Federal Reserve Prints $300 Billion
According to prominent crypto influencer, Aaron Arnold who runs the Altcoin Daily channel, Bitcoin’s price breached the coveted $26K mark the same day the U.S. Federal Reserve announced its intention to lend $300 billion to several struggling American banks, including Silicon Valley Bank and Signature Bank.
The entire crypto market was hit hard when news broke that the troubled Silicon Valley Bank (SVB) housed over $3 billion in Circle’s USDC reserves. However, with the government announcing to backstop all depositor funds, markets across all sectors surged, followed by Bitcoin as well.
Credit Suisse’s $54 Bn Lifeline
On the other hand, Credit Suisse, the 167-year-old Swiss bank, which has been plagued by compliance issues also secured a $54 billion lifeline from the Central Bank of Switzerland. This development, in turn, comes as positive news for the flagship cryptocurrency, largely for two reasons.
First, it maintained stability in the market, which leads to positive market sentiment. Second, it reveals the inherent flaws in the central banking system, which is a significant victory for Bitcoin’s core fundamentals as it was born out of the ashes of the 2008 financial crisis.
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Ethereum’s Upcoming Hard Fork
Moving away from financial institutions, Ethereum’s Shanghai hard fork upgrade is also being considered as an important event in crypto history as it goes live on April 12. This move will not only allow withdrawals of staked ETH — which is recorded to be around 17M ETH — but also lay the foundation for scalability and faster transaction processing on the Ethereum blockchain. This in turn is considered to increase the demand for the world’s second-largest cryptocurrency.
Binance Converts $1 Bn BUSD
Binance, a leading cryptocurrency exchange, also has a role to play in driving the price growth of Bitcoin. According to reports, the premier trading platform is converting the remainder of its $1 billion Industry Recovery Initiative funds into Bitcoin (BTC), Ethereum (ETH), and other digital assets. The conversion of $1 billion BUSD into Bitcoin and other digital assets is expected to create significant buy pressure in the entire crypto market which has been reflected in both Bitcoin’s and Etehreum’s price.
The “recovery fund” was first proposed by the Binance exchange in November 2022 following the collapse of the FTX with the aim of helping “projects who are otherwise strong but in a liquidity crisis.”
Pokemon’s Entry To Metaverse
One of crypto’s major offerings, the metaverse, is also turning out to be a key factor in Bitcoin’s recent rally. According to information obtained, the company behind the famous Pokemon game is gearing up to enter the metaverse scene as it plans to hire individuals experienced in fields like blockchain, web3 and metaverse. This has led to a massive uproar among crypto fans as it sets a benchmark for other crypto projects building in the metaverse space.
The Jim Cramer’s Curse In Play?
And, on a lighter note, many also speculate that Bitcoin is surging due to the “Jim Cramer Curse”, which is a jovial take on the noted CNBC host who happens to pick stocks and assets which eventually fall in value or vice versa. Recently, Jim Cramer was quoted saying “I will sell my Bitcoin right into this rally” as Bitcoin hit $22K in the past few days. Since then, Bitcoin has skyrocketed to $26K, thus proving the inverse of Cramer’s words generally come true.
Earlier, Cramer was found gloating about Silicon Valley Bank and its massive upward potential but later the bank was found to be insolvent, leading to its closure at the hands of regulatory authorities.
Also Read: Coinbase Delists 6 Top Altcoins Following Internal Review
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