The biggest banking crisis in the US has led to the demonetization of digital assets, leading to a nine month high.
Since June 12 on Sunday, the price of virtual currency has gone up to $28,474. This comes amid the expectation that central banks would slow the pace of interest rate hikes.
The banking sector has shocked the world banking scenario as it went up 26 per cent last week and has grown by over 35 per cent in just 10 days. It started with the collapse of Silicon Valley Bank and ended with the takeover of Credit Suisse by UBS at a whopping 60% discount over the weekend.
Markus Thielson, head of research and strategy at Matrixport based in Singapore, said that the momentum is driven by liquidity, because of the fact that bitcoin is an alternative liquidity vehicle.
He predicted that bitcoin could hit $45,000 by the end of 2023, with central banks finding its way into crypto assets, much like it did in 2021, when it reached record highs.
Gold prices went up 1% to their highest since March last year, erasing earlier losses, as concerns about the global banking sector returned to normal despite the rescue efforts of Swiss lender UBS to buy peer Credit Suisse CSGN.S in order to stabilise the financial markets.
Spot gold was up 1% at $2,007. After slipping 1% earlier in the session, 30 per ounce was at 30 per ounce, as of 0747 GMT. US gold futures went up 2% to $2,012. The US Federal Reserve said on Sunday that it and other big central banks would deepen liquidity by increasing the frequency of dollar supply operations into financial markets.
The second-biggest criptocurrency, ether, rose to a seven month high of $1,846. It was last at $1,768 and was 50 on Sunday.
Banking stocks and bonds plummeted on Monday after UBS secured its state-backed takeover of Credit Suisse, a deal orchestrated in an attempt to restore confidence in a battered sector.
On Sunday, top central banks moved to bolster the flow of cash around the world after being faced with the risk of a fast-moving loss of confidence in the financial system. Since the height of the COVID 19 epidemic, a global response has not been seen.