- Bitcoin is up 9% on Wednesday, approaching a key $30,000 mark.
- The rise came after First Republic Bank raised new concerns about the vulnerability of the banking sector.
- Investors are also increasing risk as they anticipate a transition from the Fed, a crypto chief told Insider.
Bitcoin surged 9% on Wednesday, approaching the $30,000 price level as concerns resurfaced over the banking sector.
Shares in First Republic Bank fell nearly 50% on Tuesday and fell another 20% on Wednesday, hitting record lows after more-than-expected withdrawals of customer deposits.
Fears intensified after Bloomberg reported that the regional bank was discussing a rescue plan that could include a sale of $100 billion in assets.
Bitcoin surged after a Silicon Valley bank collapsed in March, and industry watchers said a similar situation is emerging for the world's largest cryptocurrency amid recent waves of uncertainty.
“BTC is rising because another state-owned bank, First Republic Bank, collapsed, resurrecting the ‘It’s not your keys, it’s not your money’ narrative, prompting more and more people to embrace beauty and reliability [and] Yue Yang, chief economist at a cryptocurrency miner BTCM told Insider: “A peer-to-peer decentralized cryptocurrency monetary system.”
The Bitcoin rally on Wednesday ended a five-day losing streak. The token has been generally bullish in April and 2023, hitting a 10-month high of nearly $31,000 that month.
Meanwhile, according to Messari, the price of Ethereum has risen by 7% over the past day, while altcoins such as Solana and Polygon have also risen by 8-9%.
Michael Dunn, director of products at derivatives exchange Bitnomial, told Insider that traders "may notice a sense of risk in anticipation of the Fed's dovish policy and potential liquidity injections into the First Republic." Bank".
Another crypto executive did the same, adding that a series of bank failures like that of Silicon Valley Bank last month has left investors questioning the stability of traditional financial services.
The industry upheaval has shown that “well-established blockchain-based systems and well-received and widely used cryptocurrencies can be just as good or even better, safer, cheaper and faster than traditional banking systems,” said Mikkel Mursch. the head of the ARK36 mutual fund, an insider said.
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