Bitcoin Holds Steady as Central Bank Interest Rates and Bank Crises Weigh on Investors
Bitcoin (BTC) remained steady on Thursday, hovering below $29,000, where it has remained for the past 10 days. Investors were weighing changes in US and EU central bank interest rates and the latest bank crises. BTC had earlier dipped below the $29,000 level when the US stock markets opened, but then went on to trade flat, remaining between $28,700 and $29,000. Similarly, Ether (ETH), the second-largest cryptocurrency by market capitalisation, was also changing hands around $1,877, a 0.6% drop compared to Wednesday. The CoinDesk Market Index (CMI), which measures overall crypto market performance, however, remained up 0.3% for the day.
The banking crisis has been a major cause of concern, and many investors are now questioning whether there will be bank sector contagion. Many banks are reporting a significant decline in their stocks, including Los Angeles-based PacWest Bancorp and Phoenix-based Western Alliance Bancorporation. The latter has denied reports that it’s for sale while PacWest is evaluating options, including a possible sale. Meanwhile, the two-year Treasury yield’s note in the bond market, which acts as a gauge of near-term interest rate expectations, fell 15 basis points to 3.78%, which also weighs on the banking crisis, causing even greater concern for the markets.
Edward Moya, a senior market analyst for foreign exchange Oanda, writes in a report that BTC “isn’t seeing the same amount of flows as it did early during all the banking drama with Silicon Valley Bank “. Anthony Georgiades, co-founder of Pastel Network, a decentralised layer 1 blockchain, says: “The financial crisis that we seem to be sleepwalking into will almost certainly become real… And, ultimately, this will likely force the [U.S. Federal Reserve] into urgent rate cuts and a return to something akin to quantitative easing – or else the economy and the banking itself will be in deep, deep trouble.” However, even with the uneasy sentiment, the market has remained relatively calm, with prices of major cryptos moving little over the course of the day. Litecoin’s LTC token was almost flat at around $87.8, while Solana’s SOL token slid roughly 0.8% to trade at $21.70.
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