BT Daily News: Bitcoin is up over 40% since the March banking crisis began, and more
1.Bitcoin is up over 40% since the March banking crisis began
Bitcoin (BTC) has shown remarkable resilience amidst the recent banking crisis, as the cryptocurrency’s value has continued to rise despite the economic turmoil. Since the onset of the crisis on March 10, Bitcoin has surged over 40%, with investors flocking to the digital asset as a safe-haven store of value.Amid the crisis, the United States was seeing the development of the greatest bank collapse since the global financial crisis, as a key lender to the technology sector, Silicon Valley Bank, faced a bank run. When authorities stepped in to take control, customers frantically withdrew their money from the California-based lender.
Around the time of the bank collapse, BTC was trading at $19,669. Despite the recent news of banking contagion with two more banks, Bitcoin is currently trading at $28,249, up 3.46% in the last 24 hours and 26.32% across the week. From the beginning of the banking crisis, the price of Bitcoin has increased by more than 43% since it was at its lowest point on March 10.
The rapid price rise of Bitcoin has been attributed to several factors, including a growing distrust of traditional financial institutions, increasing adoption of blockchain technology, and the proliferation of decentralized finance (DeFi) platforms. Interestingly, in the last week, BTC has madee the biggest weekly gain in almost four years.
Bitcoin technical analysis
The sentiment on the 1-day gauges at the finance and crypto tracking website TradingView is generally bullish. It suggests ‘buy’ at 15, as the oscillators indicate ‘neutral’ at eight and moving averages in the ‘strong buy’ range at 13.
Despite the bullish gauge, Michael van de Poppe remains cautiously optimistic for BTC in the near term acknowledging the potential for further price volatility. Poppe stated in a a tweet on March 20: “Bitcoin didn’t hold above $27,700, which is now crucial if we’d like to see $30K this week. Rejecting there, and we’ll be seeing a deeper correction to $25K, most likely.”
Meanwhile, the current upturn in the cryptocurrency market, driven by the flagship decentralized finance asset, has given wings to Bitcoin mining company equities, with the price of these stocks posting large increases in terms of weekly performance.
Indeed, most Bitcoin mining businesses have seen their share prices rise due to the BTC price surge.
2. Texas Takes a Stand for Bitcoin Rights with Introduction of New Bill
Texas has always been at the forefront in terms of blockchain and Bitcoin adoption. Even though many other states and countries have shown skepticism revolving around cryptocurrencies, Texas has never failed to show its support.The state has also been a hub for several Bitcoin mining companies. Texas is promoting, advancing, and providing a platform for Bitcoin and considers it to be a cutting-edge innovation. Texas also released a report laying out a proposal to allow Bitcoin as an authorized investment for the state.
According to the latest details, Texas has introduced a new bill to protect the rights of Bitcoin holders, miners, and developers.
Texas’s new bill will protect the rights of Bitcoin holders
The bill talks about how Bitcoin has introduced several technological breakthroughs, including blockchain and distributed ledger.
The bill also stated how secure Bitcoin is:
“Bitcoin network is secure, and peer-to-peer transactions are confirmed by Bitcoin miners who use specialized computers and complex algorithms to solve math problems; the first miner to solve the problem wins the block and receives newly minted Bitcoins as a block reward”
According to the latest details from the bill, the 88th Legislature of the State of Texas now supports individuals “who code or develop on the Bitcoin network in accordance with Section 8, Article I, Texas Constitution.”
The bill also talks about the freedom for BTC miners to seek out any form of energy for securing the Bitcoin network. The new bill also states that no citizen will ever be deprived of their right to own Bitcoin and speaks about their protection. The bill also reaffirmed the safety of owning and dealing with Bitcoin in the state.
“Texas citizens shall always feel free and safe in their ownership and use of Bitcoin in the state of Texas.”
3. Bitcoin surges as liquidity taps turn on
A revival in central bank liquidity designed to stave off a financial crisis has lifted the fortunes of bitcoin in a torrid period for traditional banks.Over the last week, bitcoin has jumped 12 per cent and hit a nine-month high of $US28,400, following a banking crisis that saw the US Federal Reserve expand its balance sheet by $US300 billion and launch a new emergency liquidity program to stem bank runs like that which befell Silicon Valley Bank.
“Banking failures mean more money will be pumped into the system, and traders are getting ahead of that,” Lisa Wade, chief executive of ASX-listed DigitalX and a former Citi trader, said.
“This time last year, bitcoin was being touted as an inflation hedge, but it’s been proven not to be like a digital gold in that respect. Rather it’s still seen as a high-risk asset and the market was risk-off. Now there might be the brakes on rate hikes, so the market’s preparing for a risk-on environment.”
After the collapse of Silicon Valley Bank and the FDIC shutdown of Signature Bank, First Republic Bank was also propped up by a $US30 billion private sector rescue led by JPMorgan and ten other major institutions. On Sunday, Swiss banking giant Credit Suisse was saved from collapse by a takeover from rival UBS.
Anticipating a further wave of quantitative easing to quell anxiety around the banking system, traders have shorted banks and gone long bitcoin.
“But deeper than the short banks-long BTC trade is the fact that financial institutions are failing again,” Ms Wade said. “It’s a shift in perception. Bitcoin was invented for this very reason. It’s a peer-to-peer cash system that doesn’t use a financial institution.”
‘Bitcoin was invented for this’
Bitcoin’s origins in the 2007-08 financial crisis as a tool to combat negligence within the financial system is again a driver of adoption.
Danny Gilligan, co-founder of Westpac’s Reinventure Fund, said the combination of the speed of information flow, through social media, with the speed of engagement with money, through digital banking, has created new risks for banks. And that manifested risk has given a new audience to bitcoin.
“It’s just become clear how fragile this situation is,” Mr Gilligan said. “It illustrates the risks inherent in a fractional reserve banking system when depositors want to access their funds immediately and fully.”
While Silicon Valley Bank was forced to lock accounts, widely used stablecoin USDC de-pegged from the US dollar that same weekend. Circle, the company behind USDC, confirmed it had around $US2.2 billion tied up at the failing SVB.
In response, Binance chief executive Changpeng “CZ” Zhao converted $US1 billion of Binance-linked stablecoins into bitcoin to circumvent any issues with USDC.
“He could publicly move a billion dollars on a weekend in 15 minutes,” Mr Gilligan said. “This is the new reality.”
Heath Behncke, chief investment officer of Holon Investments, which was the subject of a stop order by ASIC last year, said banking models were under intense scrutiny and new models could be adopted in their place.
“As it stands, banks use a spread model where they take a risk with your money,” Mr Behncke said.
Daniel Roberts, chief executive officer of Iris Energy, a Nasdaq-listed bitcoin miner, said bitcoin’s role as a way to preserve wealth and complete person-to-person transactions was growing, but there were likely to be several more banking crises in the coming years.
“Tripling the Fed’s balance sheet overnight debases the currency even further, and all we’re seeing is money moving around spreadsheets,” Mr Roberts said. “Bitcoin was invented as a way to circumvent the mess that is fractional banking.”
In response, Binance chief executive Changpeng “CZ” Zhao converted $US1 billion of Binance-linked stablecoins into bitcoin to circumvent any issues with USDC.
“He could publicly move a billion dollars on a weekend in 15 minutes,” Mr Gilligan said. “This is the new reality.”
Heath Behncke, chief investment officer of Holon Investments, which was the subject of a stop order by ASIC last year, said banking models were under intense scrutiny and new models could be adopted in their place.
“As it stands, banks use a spread model where they take a risk with your money,” Mr Behncke said.
Daniel Roberts, chief executive officer of Iris Energy, a Nasdaq-listed bitcoin miner, said bitcoin’s role as a way to preserve wealth and complete person-to-person transactions was growing, but there were likely to be several more banking crises in the coming years.
“Tripling the Fed’s balance sheet overnight debases the currency even further, and all we’re seeing is money moving around spreadsheets,” Mr Roberts said. “Bitcoin was invented as a way to circumvent the mess that is fractional banking.”