Bitcoin (BTC) rose during US trading hours on Tuesday as investors pondered the recent banking turmoil and appeared to regain interest in cryptocurrencies and other assets that have value.
The largest cryptocurrency by market cap was recently trading at around $28,775, up about 2.6% over the past 24 hours, according to CoinDesk data. The price of BTC had been hovering around $28,000 for most of the past day before jumping early Tuesday after shares of two regional banks, Los Angeles-based Backwest Bancorp (PACW) and Phoenix-based Western Alliance Bank (WAL), fell 27% and 15%. respectively. Meanwhile, the latest Job Opportunities and Employment Turnover Survey (JOLTS) arrived weaker than expected.
Four US banks failed, including First Republic earlier this week, hit the economy but appeared to support cryptocurrency prices. The cold jobs data indicated that the economy is weakening and that inflationary pressures may subside, which is another potential boon for digital assets.
ether (ETH), the second largest cryptocurrency by market capitalization, also rose by 2.5% for trading hands at around $1,877. The CoinDesk Market Index (CMI), which measures the overall performance of the crypto market, is up more than 2% on the day.
Arrows headed south During Tuesday’s close, the S&P 500 fell 1.1%. Both the Dow Jones Industrial Average (DJIA) and the heavy Nasdaq Composite are down nearly 1%.
in the bond marketsThe yield on two-year Treasury notes – a measure of near-term interest rate expectations – fell by 16 basis points, to settle around 3.94%. The yield on the 10-year Treasury note fell about 14 basis points, to 3.42%.
A survey conducted by CoinShares in April of 37 investors It found that 64% believe the Fed has made a policy error with 22% saying “not yet,” meaning that it is “quite likely that the Fed will make a mistake in the near future,” according to CoinShares.
The study also found that despite a series of regulatory actions during the first quarter of the year, the weight of digital assets in portfolios rose to around 1.6%, up from 0.7% in October.
Ethereum remains the preferred asset, a finding that hasn’t changed much from the last survey in January. “This is encouraging after we have endured the uncertainty surrounding Chabela’s upgrade,” CoinShares said.
Meanwhile, fund managers believe that BTC and ETH offer the most compelling growth projections and that appetite for altcoins is lower, the survey says.
“In a weak (risk-off) economy, this would hurt ETH, causing ETH to perform negatively,” Greg Magadini, director of derivatives at crypto analytics firm Greg Magadini, noted in a recent newsletter. “Recession would cause the Fed to steer and cut interest rates later this year (good for gold and BTC).
Magadini said that BTC should continue to outperform and increase its market share.