Bitcoin at 9-month high! SVB, Credit Suisse collapse gives boost to crypto prices

Bitcoin climbed to nine-month high as the biggest banking crisis in the US drove away investors towards "safe havens" like digital assets.

Bitcoin has seen its highest jump since June 12 on Sunday to reach $28,474. This comes amid surging expectations that central banks would slow the pace of interest rate hikes.

Bitcoin jumped up 26 per cent last week and has grown by over 35 per cent in just 10 days as turmoil in the banking sector has shocked the global banking scenario. It started with the collapse of Silicon Valley Bank and  ended with the UBS' takeover of Credit Suisse at a whopping 60% discount over the weekend.

"The momentum is all driven by liquidity, as bitcoin is an alternative liquidity vehicle," Markus Thielson, head of research and strategy at digital asset financial services firm Matrixport based in Singapore told Reuters.

He anticipated that bitcoin could hit $45,000 by 2023-end, with liquidity from central banks finding its way into crypto assets, much as it did during 2021, when bitcoin scaled record highs.

Meanwhile, gold prices jumped 1% to their highest since March last year on Monday, erasing earlier losses, as worries about the global banking sector returned to the fore despite rescue efforts by Swiss lender UBS to buy peer Credit Suisse CSGN.S to stabilise broader financial markets.

Spot gold was up 1% at $2,007.30 per ounce, as of 0747 GMT, after sliding 1% earlier in the session. US gold futures climbed 2% to $2,012.50.

The US Federal Reserve on Sunday said it and other big central banks would deepen liquidity by increasing the frequency of dollar supply operations into financial markets.

Ether, the second-biggest cryptocurrency, rose to a seven-month high of $1,846.50 on Sunday and was last at $1,768.

Traditional assets such as banking stocks and bonds plummeted on Monday after UBS sealed its state-backed takeover of Credit Suisse, a deal orchestrated in an attempt to restore confidence in a battered sector.

Top central banks, faced with the risk of a fast-moving loss of confidence in the stability of the financial system, moved on Sunday to bolster the flow of cash around the world. Such a global response has not seen since the height of the COVID-19 pandemic.

Also Read: Crypto Price Today: Bitcoin holds $27,000; Solana & XRP climb up to 6%