The financial crisis is spreading around the world as the financial crisis from the U.S. began due to the de facto bankruptcy of the Silicon Valley Bank (SVB), and Credit Suisse (CS), a major European investment bank, suffered a liquidity crisis. As a result, financial stocks around the world plunged, and the market capitalization is estimated to have disappeared by about $500 billion.However, Bitcoin has been rallying day after day. This is due to the expectation that Bitcoin will become a refuge in the global financial crisis.
The U.S. financial crisis began on the 10th. When SVB went bankrupt due to the authorities’ order to suspend operations, U.S. financial stocks plunged en masse, and Bitcoin also plunged.
On the 10th, Bitcoin collapsed by 20,000 dollars. In addition, cryptocurrency (virtual currency) was also greatly shocked, with USDC, the second-largest stablecoin (cryptocurrency without price change), collapsing its dollar peg.However, the atmosphere was immediately reversed. Bitcoin recovered $20,000 on the 11th and has been rallying day after day.Bitcoin surpassed $22,000 on the 13th, $24,000 on the 14th, and $26,000 on the 15th, respectively. It also surpassed 27,000 dollars on the 17th and 28,000 dollars on the 20th.
As of 8:40 a.m. on the 20th, Bitcoin is recording USD 28,240 on CoinMarketCap, a global coin market broadcasting site, up 4.64% from 24 hours ago. Bitcoin has soared by 30% since the SVB crisis on the 10th.
This is attributed to expectations that cryptocurrencies such as Bitcoin could become a refuge as the existing financial sector faces a crisis.As a result, experts are saying that Bitcoin is likely to surpass $30,000 as well.In particular, if the Fed, the U.S. central bank, freezes interest rates at the Federal Open Market Committee (FOMC) to be held from the 21st to the 22nd, Bitcoin is expected to rally further to surpass USD 30,000.So far, many predict that the Fed is likely to raise interest rates by 0.25 percentage points despite the financial crisis.
In fact, the probability that the Fed will freeze the interest rate at the FOMC in March is reflected at 26.2% on the Chicago Mercantile Exchange (CME), where federal fund rate (US benchmark rate) futures are traded. In comparison, the probability of a 0.25 percentage point increase is 73.8%.The Fed is likely to raise interest rates.However, if the Fed freezes the interest rate, Bitcoin will make an additional rally, surpassing $30,000, according to CoinDesk, a media outlet specializing in cryptocurrency.
KS CHOI
US ASIA JOURNAL
