The global cryptocurrency market has broken its recent losing run and recovered ground, with Bitcoin and Ethereum leading the drive. Bitcoin, the world’s oldest and most valuable cryptocurrency, surpassed the $25,000 barrier early Friday morning, while Ethereum garnered bids past the $1,700 mark.
Other prominent cryptocurrencies in the green are Dogecoin, Ripple, Litecoin, and Solana.
Bitcoin has gained more than 5% in the previous 24 hours and is now trading above $25,600. This spike, together with other cryptocurrencies, has lifted the whole crypto market worth past $1 trillion, boosting investor confidence.
Despite this, other experts are suspicious, believing that this might be a bull trap driven by good mood, particularly given the low trade volumes. The recent failures of SVB and Silvergate banks have heightened market liquidity worries, pushing clients to shift their emphasis to digital assets. Following the collapse of major bank stocks, bitcoin app downloads have climbed by 15%, according to Apptopia.
Investors are looking to diversify their portfolios and decrease risks, which has heightened interest in the objective of creating a cryptocurrency to remedy the flaws of the current financial system. Ethereum, which is now the second-largest cryptocurrency by market value, is expected to surpass its all-time high of $2,000. The current spike in the price of ETH is mostly due to the use of Ethereum’s blockchain technology in decentralized finance (DeFi) and non-fungible tokens (NFTs).
Furthermore, the planned Ethereum Improvement Proposal (EIP) 1559 update, which is due for July 2021, is expected to limit Ethereum supply and produce a supply crisis, potentially driving its price even higher. Credit Suisse, an insolvent investment bank, receives a $50 billion loan from the Swiss National Bank. For the time being, the action appears to have spared Europe from the horrors of a banking crisis. Nonetheless, uncertainty remains as the COVID-19 outbreak and geopolitical tensions continue to have an impact on the global economy.
As a result, the announcement of the Swiss National Bank’s $50 billion loan to Credit Suisse had little influence on Bitcoin (BTC) prices. The cryptocurrency industry is now enjoying a value increase, led by Bitcoin and Ethereum. Investors are nonetheless bullish about cryptocurrencies’ ability to disrupt traditional financial institutions.
When the overall market capitalization of cryptocurrencies exceeds $1 trillion, it is clear that investors are becoming more interested in cryptocurrencies and their potential. Given the market’s concerns about liquidity and future interest rate cuts, it will be fascinating to observe how the cryptocurrency market fares in the next months.
It is vital to note that the US may lower interest rates in the later half of the year to safeguard banks. This move may inspire investors to take up new long-term holdings and enhance capital inflows into riskier assets.
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