The cryptocurrency bitcoin hit a 10-month high following the worst banking turmoil since the 2008 global financial crisis and is now worth more than $30,000.
In Asian trading on Tuesday, one bitcoin was worth $30,438, the highest since June last year, but still less than half of its November 2021 all-time high of more than $67,000.
As one of the world’s largest cryptocurrency exchanges, the value of the main cryptocurrency has recovered from the blow it took late last year, FTX, broke and its founder Sam Bankman-Fred wash Charged with fraud.
The value of the leading cryptocurrency has been steadily rising since March and has breached the $30,000 threshold amid expectations that the U.S. central bank, known as the Federal Reserve, will stop raising interest rates, thereby maintaining borrowing costs rather than raising them .
What is the main goal of cryptocurrencies?
fed has legs raise interest rates in an effort to bring the stubborn high Inflation falls.
However, markets now expect the Fed to be less likely to raise rates higher for longer as it tries to minimize stress on the banking sector.
More than a quarter (28.6%) of economic forecasters don’t expect a U.S. rate hike next month, while the remaining 71.4% expect a rise of 0.25 percentage points.
High interest rates create problems for banks and are one of the factors behind Silicon Valley bank collapses And the worst banking turmoil since the 2008 global financial crisis.U.S. banks Signature Bank and Silvergate Bank collapse, Switzerland’s second largest bank Credit Suisse Taken Over Swiss rival UBS.
However, high interest rates also help banks’ profitability.For example, NatWest’s profit increased to Highest level since the global financial crisis As the money earned on the loan minus the interest paid, increases.
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Bitcoin value has been rising since the FTX crash, but was particularly strong in March following the collapse of three U.S. banks.
The turmoil has strengthened the belief among bitcoin enthusiasts that cryptocurrencies are a more attractive alternative to traditional finance.