The crypto market pushed higher as efforts to shore up the banking sector and bets that the US may start cutting interest rates later this year bolstered investor sentiment.
Bitcoin, the largest token, rose as much as 4.9% and was trading at about US$25 610 as of 10.45am in Singapore on Friday. Second-ranked ether added roughly 3%, while smaller tokens like solana and polkadot also jumped.
“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,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Bitcoin has climbed about 55% so far this year and is in touching distance of the highest level since June 2022. But the token remains a long way off its record of almost $69 000 from November 2021.
Nervousness about the banking sector after the collapse of three regional US lenders and pressure on Credit Suisse Group has triggered a powerful rally in sovereign bonds as investors seek out perceived havens.
“The plunge in yields is welcome news for many crypto start-ups,” Edward Moya, senior market analyst with Oanda, wrote in a note. — Sunil Jagtiani, (c) 2023 Bloomberg LP