Bitcoin has become a safe bet for many in the financial world amid a series of turbulent developments across the banking industry, reports have revealed,
A Reuters analysis has stated that, as global markets nosedive into a recession, numerous cryptocurrencies have recovered while stock trading indexes have dipped.
According to figures, Bitcoin reached 21 percent in March while the S&P 500 tumbled 1.4 percent. Gold has also gained roughly 8 percent amid the market chaos.
Stéphane Ouellette, CEO at digital asset investment platform FRNT Financial, said as quoted by Reuters:
“If you were going to describe an environment where there were successive bank runs because central banks are trying to fight inflation with fast rate increases, that is pretty close to as spot-on a thesis for owning bitcoin as you’ve ever heard.”
Ouellete concluded: “The bearish argument would be that these dynamics are temporary, and ultimately this rally is not going to sustain.”
Bitcoin vs Big Banks
This has allowed the digital asset to become a safe haven for investors despite ongoing banking and crypto trading platform collapses at FTX as well as Silvergate, Signature, and Silicon Valley Banks.
Additionally, Credit Suisse teetered on the verge of collapse last week, with banks losing billions in market value, triggering national regulators to crack down on the companies.
To date, Bitcoin holds roughly 43 percent of all cryptocurrency markets, with overall crypto market capitalisation spiking to 23 percent, or $1.1 billion, after 10 March.
Amid the Bitcoin rally, however, several key stablecoins have lost their dollar peg due to market instability. Circle USD (USDC) recently depegged from its 1:1 ration over exposure to now-defunct SVB’s US operations.
This forced its market capitalisation to plummet $36.8 billion USD on Friday last week. Conversely, Tether’s market cap rose to nearly $4 billion USD.
