Bitcoin Surges Over $24K Amid Banking Instability
Bitcoin, the world’s largest cryptocurrency by market capitalization, rose by 18% in the past 24 hours to surpass the $24,200 mark, amidst the fallout from the collapse of Silicon Valley Bank. The surge is particularly surprising as crypto assets usually decline during periods of financial market unrest.
Short Squeeze and Liquidations
The surge is attributed to a short squeeze, which historically sends prices higher. Coinglass data reveals that traders liquidated $300 million worth of crypto positions on Monday, $140 million of which were Bitcoin liquidations, with $160 million in short positions.
Investors Recognize Fragility of Central Banking System
Sean Farrell, head of digital-asset strategy at FundStrat, believes the bitcoin rally is due to investors recognizing the fragility of the central banking system and the solutions Bitcoin offers. Farrell adds, “Crypto is responding to the anticipated change in liquidity conditions as it should.”
President Biden’s Call for Regulatory Strengthening
The increase in bitcoin’s price also comes as President Joe Biden has vowed to call on Congress and bank regulators to strengthen rules for financial institutions following the collapses of Silicon Valley Bank and Signature Bank.
In the face of these events, investors are increasingly recognizing the importance of decentralized financial systems and digital assets like Bitcoin.
Source: CoinDesk
