Bitcoin gains 70% this year, but central banks are on the rise

LONDON: At the turn of the year, bitcoins were in the grip of a bleak midwinter, down and out of a 2022 defined by tumbling coin prices, bankruptcies and corporate scandals.

It got its mojo back less than three months later. It has outpaced other major assets with gains of more than 70 percent this year and was near its highest in nine months on Wednesday, as it was trading near its highest in nearly a year.

The original and biggest criptome has been here before, its 15 year history peppered with dramatic price increases and equally vertiginous drops. Markets believe central bank hikes to the cost of credit are nearing their peak, and this scenario is set to boost risk-on assets such as bitcoins, six investors and analysts from both traditional finance and traditional finance.

Noelle Acheson, an economist who has followed the sector for seven years, said the macro narrative is the number one. It is arguably the most sensitive asset to monetary liquidity out of all risk assets, and it is not just a risk asset. There are a number of factors at play, from the banking sector to the enduring hopes thatbitcoin can achieve wide use as a form of payment.

It was its best week in four years on Sunday, and has gained 45 per cent in just 12 days.

The collapse of US banks Silicon Valley Bank and Signature Bank on Sunday caused a takeover of 167 year old Credit Suisse by rival UBS, which claims thatBitcoin is an asset immune to risks in traditional finance.

It's rather narrow-minded to say thatBitcoin is going to succeed because a bank has failed, said Usman Ahmad, CEO of Zodia Markets, the venture arm of Standard Chartered and Hong Kong firm BC Technology Group.

Confidence is a key factor in the banking system, and confidence in the banking system has been damaged.