‘Massive Shock’ — New Bank Crisis And $300 Billion Fed Pump Has Primed Bitcoin After Huge Crypto And Ethereum Price Rally

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by Forbes

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‘Massive Shock’ — New Bank Crisis And $300 Billion Fed Pump Has Primed Bitcoin After Huge Crypto And Ethereum Price Rally

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Bitcoin has found its feet this year after a rocky 2022 that saw a steep price crash and the emergence of serious regulatory concerns.

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The bitcoin price has climbed to around $28,000 per bitcoin, up from under $17,000 at the beginning of the year. The combined bitcoin, ethereum and crypto market has added over $300 billion amid rising expectations of a Federal Reserve u-turn and institutional financial giants quietly expanding into crypto.

Now, some of the biggest bitcoin, ethereum and crypto bulls are predicting the ongoing banking crisis that's spread to German giant Deutsche Bank could have primed bitcoin for a fresh break out.

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"The behavior of the [bitcoin] price through this crisis is going to attract more institutions," Ark Investment Management's Cathie Wood told Bloomberg this week, alongside bullish technical price analysis that shows bitcoin could be headed for around $35,000 per bitcoin.

"The fact that bitcoin moved in a very different way from the equity markets, in particular, was quite instructive," Wood, who's previously said she expects a huge bitcoin and ethereum price break out, added.

The banking crisis that began with the collapse of U.S. Silicon Valley Bank, Signature and Silvergate has spread to Europe, first engulfing Credit Suisse and now threatening Deutsche Bank. Deutsche Bank's share price fell sharply on Friday, adding to a crash that's wiped away a fifth of the bank's market capitalization so far this month.

"The banking crisis, which caused the market to price in rate cuts starting in the summer, has had little knock-on effect on crypto (so far)," Macro Hive analysts wrote in an emailed note.

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This week, the Federal Reserve opted for a 25 basis point interest rate hike despite earlier increasing its balance sheet by $300 billion to prop up the banking system.

Expectations have soared over the last few weeks that the Fed will be forced to flip dovish due to the banking crisis -- something some think could trigger a return to a bitcoin, ethereum and crypto bull market.

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