According to data from CoinGecko, Bitcoin posted 6% gains in the last 24 hours to trade at $26,798 as of Friday afternoon. The BTC price increase uplifted the total market cap of all cryptocurrencies, which rose by 5% in the past day to $1.16 trillion. The Asian and the US stock markets have also seen a similar surge.
Drivers of BTC Price Increase
According to financial analysts, this trend has been fueled by major lenders in Goldman Sachs and JP Morgan, among others, agreeing to inject over $25 million to save American-based First Republic Bank (FRB) from insolvency.
In addition, inflation data for last month released earlier this week, indicating signs of slowing down, appeared to have aligned with the market expectations. Data on the CME FedWatch tool shows that 84% of traders believe the Federal Reserve will hike rates by 25 basis points, while the rest anticipate that the Central Bank will maintain the present rate.
Further, the yield of the dollar is reducing as the Federal Reserve possibly moves away from quantitative tightening, thus triggering renewed interest in crypto and stock, which are considered as risk-on assets.
In a tweet, the managing partner at Biyond Trader, Nathan Batchelor, said that BTC is reacting to the rise in the Federal Reserve’s balance sheet alongside the form of ‘quantitative easing light’ taken in the wake of Silicon Valley Bank’s collapse. Batchelor claims he is bullish about Bitcoin going beyond $28,000.
Another driver of Bitcoin’s price surge is the risk of a worldwide banking crisis. Several banks across the globe are staring at a possible insolvency crisis. Despite various governments’ efforts to backstop the fallout at the time being, a potential banking failure is fueling positive sentiment regarding decentralized alternatives like Bitcoin.
Price Analysis of Other Cryptocurrencies
As of this writing, the entire crypto market is green. Data on CoinGecko shows that Ethereum has increased by 5.5% in the past 24 hours to trade at $1,740. With the network’s Shanghai upgrade slated for April 12, it remains to be whether the token will continue to increase in value ahead of that massive event. ETH market cap also increased to $207 billion, down from $199 billion on March 15.
Meanwhile, BNB increased by 7.6% to $334, Cardano surged by 4.5% to $0.339119, and Polygon and Solana both rose by 5.5% to $1.19 and $20.48, respectively.