Tonight the price of Bitcoin has hit an all-time high above $29,000 amid fears of a U.S. banking crisis. new when shares in First Republic Bank fell 50%.
Bitcoin price hit a high of $29,173 before falling slightly to trade at $29,043.35. However it appears that the price of Bitcoin has yet to fully recover from its recent decline, and remains down 4.7% on the week.
Shares in San Francisco-based First Republic Bank fell on Wednesday following a dismal quarterly report in which it reported higher-than-expected withdrawals of more than $100 billion in March, raising concerns about the regional lender's solvency.
The U.S. banking sector has faced challenges in recent months. In March, regulators shut down Signature Bank, while Silicon Valley Bank collapsed due to an inability to repay loans. The uncertainty has revived the narrative that Bitcoin is a "safe haven" asset.
Earlier this month, , BitMEX CEO Arthur Hayes told that crypto serves as a hedge against risks from the traditional banking system. Gold also posted positive gains with a 0.75% rise on Wednesday, while the US dollar index which measures the US dollar against six major currencies slipped 0.40% to trade at 101,190 due to faltering confidence in the US banking system.
Bitcoin's positive move came on the back of declines in the top stock market indexes, the S&P 500 and the Nasdaq 100. Both indexes fell sharply on Tuesday, posting losses of 1.58% and 1.01%, respectively. Index futures showed further losses for the S&P 500 index, with a slight gain for the high-tech index on April 26.
Correlation indicators show that Bitcoin's correlation with the stock market has declined since early April, while its correlation with gold is strengthening.
The rise in Bitcoin prices is also due to the prospect of a new injection of liquidity into the market from the Federal Reserve or other institutions, following the uncertainty surrounding First Republic Bank.
Market players remain attentive to the latest sentiments occurring in the market.
