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What’s really behind the sudden rise of bitcoin? The world’s number one digital currency has had a very successful 2023 thus far, spiking by as much as $12,000 in the last three months, but while it’s easy to assume that the asset is on the rise strictly because of banking failures in America, some analysts believe the truth is more complicated than that.
Bitcoin Is Really Moving Up This Year
Not long ago, bitcoin reached a new nine-month high of $28,000. While this wasn’t where the currency stood in November of 2021 (during that time, bitcoin hit a new all-time high of about $68,000 per unit), things are starting to look up for the currency, especially when one considers how bad 2022 really was.
During that year, the crypto space lost more than $2 trillion in valuation. This was due, in part, to major assets such as BTC losing as much as 70 percent of their overall values, and many investors wound up on the losing side of the spectrum.
So, the big question is, “What’s fueling these present gains?” Noelle Acheson, an economist that’s been tracking the crypto sector for the past seven years, says that indeed the banking failure of America is largely behind the rise, though there are smaller aspects within that realm that seem to be contributing as well.
In a recent interview, she said central bank hikes are more the reason for the sudden spikes along with the fact that credit costs are nearing their peak. This is causing a lot of people to turn their backs on centralized financial services and find alternative methods of investing and garnering capital, and bitcoin is becoming a major answer for several of them. She said:
The macro narrative is the number one. Bitcoin is not just a risk asset; it is arguably the most sensitive to monetary liquidity out of all of the risk assets.
She also said bitcoin is still greatly propelled by a belief that it will someday fulfill the prophecy of pushing credit cards, checks, and fiat currencies to the side and serve as the ultimate payment method.
Other analysts are rather dismissive of the idea that BTC is doing well because banks are not. Usman Ahmad – CEO of Zodia Markets – explained in a statement:
It’s rather narrow-minded to say that bitcoin is going to succeed because a bank failed, but confidence is almost a critical factor. Confidence in the banking system has been damaged.
There Are Many Investors Playing Important Roles
Zhong Yang Chan – head of research at Coin Gecko – also threw his two cents into the mix, saying:
Bitcoin’s recent bull run looks to be mainly supported by individual investors, ranging from retail to whales, as we have seen evidence of institutions exiting during this rally.