Bitcoin has risen above $29,000 following a drop in the shares of First Republic Bank. It has once again highlighted the value of crypto. Now, the public confidence in crypto and Bitcoin is skyrocketing.
On Wednesday, Bitcoin’s value surged above $29,000. Meanwhile, shares in First Republic Bank plummeted 50%, which renewed interest in Bitcoin’s status as a “safe haven” asset. CoinGecko data shows that Bitcoin reached a peak of $29,173 and is presently trading at just below $28,950, reflecting a 5.7% increase for the day. Nevertheless, Bitcoin’s recent slump still impacts its overall performance as it is currently down 4.7% for the week.
First Republic Bank, based in San Francisco, experienced a significant drop in its shares on Wednesday morning following a disappointing quarterly report. The bank reported that it experienced more than $100 billion in withdrawals in March, which raised concerns about its solvency.
This news has highlighted the struggles faced by the U.S. banking sector in recent months, with Signature Bank being shut down by regulators and Silicon Valley Bank collapsing due to insolvency. This uncertainty has reinforced crypto’s confidence. BitMEX CEO Arthur Hayes recently stated that cryptocurrencies serve as a hedge against risk in the traditional banking system, warning that everyone should have some hard asset outside of the banking system, such as crypto or gold.
Bitcoin and Gold Correlation Increases
On Wednesday, gold recorded a 0.75% increase, and the DXY, a measure of the dollar’s value relative to other major currencies, fell 0.31% due to doubts about the strength of the US banking system. Bitcoin’s positive performance came as the S&P 500 and Nasdaq 100 indices experienced significant declines on Tuesday, with losses of 1.58% and 1.01%, respectively. The correlation between Bitcoin and the stock market has decreased since the beginning of April, while its correlation with gold has strengthened, as indicated by the correlation coefficient. The S&P 500 futures market suggests further declines, while the tech-heavy Nasdaq 100 index is expected to make slight gains on April 26.
Closing Thoughts
This week, the market outlook is looking much better. Many traders are very positive about BTC’s growth. The fear and greed index still gives an edge towards greed. However, it is best to do proper research and trade carefully.
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