Bitcoin has broken through the $30,000 mark for the first time since June 2022, as investors gain optimism about the Federal Reserve’s monetary policy and banking turbulence from March fades away. The cryptocurrency is up 6.75% in the last 24 hours, trading at $30,237.
Bitcoin became widely known in 2017 when its price reached a record high of almost $20,000. After remaining steady for some time, its price began to rise again in late 2021 and early 2022, eventually reaching $30,000 in June 2022.
Banxa’s U.S. CEO and Chief Legal Officer Richard Mico said the market is anticipating a slowdown in growth and a more relaxed monetary policy from the Fed this year.
“It’s clear that the market is pricing a slowdown in growth, and in turn a loosening of monetary policy by the Federal Reserve over the course of 2023,”
“It’s clear that the market is pricing a slowdown in growth and, in turn, a loosening of monetary policy by the Federal Reserve throughout 2023,” Mico said.
As observed from the bond market, the U.S. 2-Year Treasury note has declined to less than 4% after reaching a peak of over 5% in early March. This indicates that traders have rapidly reversed their expectations of future Fed rate hikes. Mico predicted that, as a result, the market would likely receive a significant amount of liquidity injection.
“Already, Bitcoin has been the best-performing asset of 2023, and it usually is the asset that responds most quickly and violently to these kinds of monetary shifts,” he added.
Bitcoin’s performance so far
After reaching $30,000 on June 10, 2022, Bitcoin’s value dropped below $20,000 for large parts of the year and into the first weeks of 2023. Over the past three weeks, it has hovered around $28,000 as cautious investors assess the impact of a near banking meltdown, ongoing inflationary pressures, and other macroeconomic uncertainties.
Despite this, Bitcoin is up approximately 80% year-to-date, starting in 2023 at about $16,600. The cryptocurrency experienced a surge in January as signs of inflation waned, then stalled in February before regaining momentum in late March following the failures of Silicon Valley and Signature banks.
Some investors began questioning the stability of the current monetary system and regained their interest in assets that hold their value, including gold which has also recently spiked, reaching $2,000 for the first time since 2020. If you are looking for a safe place to buy and sell crypto, you can check our in-depth reviews of leading crypto exchanges.
According to Mico, the banking crisis has sparked a narrative shift contributing to Bitcoin’s growing momentum. He said that Bitcoin is increasingly viewed as a trustworthy method of payment that avoids the issues associated with storing money through a third-party intermediary or a bank.
Mico also believed that the narrative surrounding BTC adoption is shifting due to the banking crisis, which is helping to fuel Bitcoin’s momentum.
“De-dollarization is also increasingly becoming part of the narrative, further accelerating BTC adoption,” he said. “BTC is now properly starting to be perceived as a risk-off asset.”
Similarly, Bob Ras, co-founder of Sologenic – a blockchain-powered platform that enables tokenized asset creation, trading, and exchange – commented that Bitcoin has become increasingly attractive as a safe haven asset and decoupled from stocks.
“While the 2020-2021 period was perceived as Bitcoin’s breakthrough moment, the present time truly marks its ascendance onto the global stage as a formidable asset,” Ras wrote in an email to CoinDesk.
“Amidst heightened geopolitical instability, faltering banking systems, and mounting concerns surrounding reserve currencies, Bitcoin has emerged as the reliable refuge many had anticipated. This crucial juncture signifies a pivotal advancement for the digital asset sector.”