Investors appeared relieved as global markets showed indications of recovery following back-to-back bank failures. The cryptocurrency market has made a massive comeback in the last week after falling below the critical $1 trillion threshold. However, reports indicate that more pain is on the way, as the easy cash period appears to be coming to an end.
Bitcoin Surge Fueled by Falling Interest Rates
The market was shocked by the financial crisis caused by the failure of crypto-friendly Silicon Valley Bank (SVB). SVB was crushed by heavy losses on its bond holdings as interest rates rose. This implies that further monetary tightening will ultimately cause more market pain.
In the aftermath of rising Fed rates, the digital asset market has seen massive outflows and price drops over the last year. According to the report, countries such as the United States, Europe, and Australia have jointly raised rates by approximately 3,300 basis points. However, the recent influx of cash left the crypto market in the green, as it was supported by indications of a future rate drop.
Bitcoin (BTC), the world’s largest cryptocurrency, experienced some unexpected gains during the escalating financial crisis. Bitcoin’s worth has risen by 23% in the last 30 days. At the time of publication, BTC was selling at an average price of $28,549 USD.