Bitcoin rose 26% last week, its best weekly gain since April 2019, and has soared some 40% in 10 days as turmoil in the banking sector rippled around the globe - culminating, so far, in UBS Group's takeover of rival Credit Suisse Group AG over the weekend.
Traditional assets such as banking stocks and bonds
plummeted on Monday after UBS sealed its state-backed takeover
of Credit Suisse, a deal orchestrated in an attempt to restore
confidence in a battered sector.
Top central banks, faced with the risk of a fast-moving loss
of confidence in the stability of the financial system, moved on
Sunday to bolster the flow of cash around the world. Such a
global response has not seen since the height of the COVID-19
pandemic.
"Its stunning rally is the result of the banking crisis, and
as the interest rate markets prices in rate cuts in the second
half of 2023," said Tony Sycamore, an analyst at IG Markets,
predicting a move towards $32,000 should bitcoin hold above the
key support level about $25,000.
Other market players predicted that bitcoin would benefit from central bank efforts to bolster liquidity in the global financial system. It rose to a record of $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.
"The momentum is all driven by liquidity," said Markus Thielson at digital asset firm Matrixport in Singapore. (Reporting by Tom Wilson in London and Georgina Lee in Hong Kong; Editing by Christian Schmollinger)
