Bitcoin near 9-month high as bank turmoil sparks rally

Bitcoin hovered near nine-month highs on Monday and has closed out its best week in four years as turmoil in traditional banking drives some investors to turn to digital assets.

The biggest cryptocurrency by market value fell 1.8 per cent in Asia hours to $27,549 after hitting its highest since June 12 on Sunday at $28,474.

It rose 26 per cent last week and is up more than 35 per cent in ten days as turmoil in the banking sector has rippled around the globe — beginning with the collapse of Silicon Valley Bank and culminating, so far, in UBS’ takeover of Credit Suisse at a discount over the weekend.

“The momentum is all driven by liquidity, as bitcoin is an alternative liquidity vehicle,” said Markus Thielson, head of research and strategy at digital asset financial services firm Matrixport based in Singapore.

He expects bitcoin can hit $45,000 by year’s end, with liquidity from central banks finding its way into crypto assets, much as it did during 2021, when bitcoin scaled record highs.

The US Federal Reserve on Sunday said it and other big central banks would deepen liquidity by increasing the frequency of dollar supply operations into financial markets.

Ether, the second-biggest cryptocurrency, rose to a seven-month high of $1,846.50 on Sunday and was last at $1,768.