The crypto market saw a rise in prices as investor sentiment was boosted by efforts to shore up the banking sector and speculation that the US may start cutting interest rates later in the year. Bitcoin, the largest token, rose by up to 4.9% and was trading at around US$25,610 as of 10:45 am in Singapore on Friday. Ether, the second-ranked token, added roughly 3%, while smaller tokens such as Solana and Polkadot also experienced price jumps.
According to Noelle Acheson, author of the Crypto Is Macro Now newsletter, “Any sign of interest rate cuts should push funds to riskier assets, which is likely to be enough to bring more institutional funds into the crypto market, regardless of whether macro traders understand or believe in the longer-term bitcoin investment thesis”.
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Bitcoin has seen a 55% increase in price so far this year and is inching closer to its highest level since June 2022. However, the token is still far from its record high of almost $69,000 from November 2021.
Concerns over the banking sector after the collapse of three regional US lenders and pressure on Credit Suisse Group have caused a powerful rally in sovereign bonds as investors search for perceived safe havens. “The plunge in yields is welcome news for many crypto start-ups”, said Edward Moya, senior market analyst with Oanda, in a note.