Bitcoin surged to its highest level since June 2022 and just before its pre-FTX bottom, climbing as high as $26,500 on Tuesday morning, extending its recent rally in response to the brewing financial crises and bank collapses.
Bitcoin’s market cap was last at $501.95B or 44.52% of the total cryptocurrency market cap, while the price is still down 62% from its all-time high of $69,000 set on November 10, 2021.
Like Bitcoin, Ether, the second largest in value digital coin gained 11% yesterday, trading as high as $1,780 (2023 peak) before retreating to the current levels of $1,700, waiting for the next price catalyst to move either side.
The move upwards pushed Ethereum’s market cap up to $213.47B, or 19% of the total cryptocurrency market cap, while the price is still down 64% from its all-time high of $4,864 set on November 10, 2021.
Both Bitcoin and Ethereum gained more than 20% since last Friday, when U.S. regulators shut down Silicon Valley Bank and Signature Bank, sending investors to the decentralized currencies for safety.
Bitcoin, which started 2023 at around the $16,500 mark, has risen over 50% so far in the year, while Ether gained 45% year to date, starting the year at around $1,200.
Following the ongoing banking crisis and the growing stress for the financial system, many investors have turned bullish on cryptos as they believe that Federal Reserve could pause or soften interest rate hikes to prevent further economic damage.
In such a case, the U.S. dollar could have weakened from the current levels, benefiting dollar-denominated digital currencies such as the BTC/USD or ETH/USD pairs, and improving the appetite for risk assets like cryptocurrencies.
Some crypto enthusiasts believe that cryptocurrencies will shine again, following the recent US banking kerfuffle, despite a different cause for concern; maybe or-, especially Bitcoin, since it was created for a time like this, as it was inspired by the 2008 financial crisis, launching in January 2009. Cryptocurrency prices skyrocketed also during the Cyprus banking crisis, nearly 10 years to the date.