Bitcoin‘s rally in recent days has taken it closer to the important milestone of $30,000, as global banking systems continue to experience turmoil.
Since March 8, when Silicon Valley Bank’s troubles first emerged, Bitcoin has gained about 25%. The digital currency has added over 20% since the beginning of this month, reaching around $28,000, its highest since June last year.
Bitcoin last traded at $30,000 during Celsius’ bankruptcy meltdown. Investors are finding comfort in the fact that digital assets are beyond regulators’ reach and the financial system, which isolates them from broader bank sector issues.
The crisis of confidence that has affected three US lenders—Silicon Valley Bank, Silvergate Capital Corp., and Signature Bank—has spread to Europe as well, where UBS Group AG agreed to buy Credit Suisse Group AG for over $3 billion in a government-brokered deal. Market watchers believe this is all contributing to Bitcoin’s rally.
Bitcoin proponents argue that the digital asset’s limited supply could potentially be used as a hedge against inflation. However, over the past two years, Bitcoin’s value has decreased by more than 50% as cost-of-living prices have increased sharply, putting this proposition to the test.
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