On Monday, Bitcoin traded near nine-month highs and finished the week with its best week in four years as investors fled the struggling conventional banking sector in favor of digital assets.
After reaching its best level since June 12 on Sunday at $28,474, the largest cryptocurrency by market value dropped 1.8% to $27,549 during the Asian morning hours.
It increased 26% last week and has increased more than 35% in the past ten days as a result of the global banking crisis, which started with the failure of Silicon Valley Bank and so far culminated in UBS’ weekend acquisition of Credit Suisse at a discount.
Bitcoin is an alternative liquidity vehicle, so liquidity is what’s driving the momentum, according to Markus Thielson, director of research and strategy at Singapore-based digital asset financial services company Matrixport.
By the end of the year, he projects that bitcoin will reach $45,000, with central banks injecting liquidity into digital assets much like they did in 2021 when bitcoin scaled new highs.
The U.S. Federal Reserve announced on Sunday that it and other significant central banks would increase the frequency of dollar supply activities into financial markets in order to increase liquidity.
The second-largest cryptocurrency, ether, reached a seven-month peak on Sunday of $1,846.50 and last traded at $1,768.