- Bitcoin remains stable at around $29,000 as investors analyze U.S. and European central bank interest rate increases and banking crisis contagion.
- Other major cryptocurrencies like Ether, Litecoin, and Solana also traded in a narrow range..
Bitcoin (BTC) remained steady at around $29,000 on Thursday, where it has stayed for the last 10 days, as investors pondered over the latest banking crisis debacles and U.S. and European central bank interest rate increases.
The market capitalization’s largest cryptocurrency was trading at roughly $28,800, down by 0.3% in the last 24 hours. Meanwhile, Ether (ETH), the second-largest cryptocurrency, followed a similar pattern and was changing hands at around $1,877, a decrease of 0.6% from the previous day.
Major cryptocurrencies remained mostly stagnant throughout the day, with Litecoin’s (LTC) token trading almost flat at approximately $87.8, while Solana’s (SOL) token fell roughly 0.8% to trade at $21.70.
Stocks of several regional banks tank, raising concerns about bank sector contagion
Equity markets struggled on Thursday, with Wall Street’s benchmark equity index, the S&P 500, closing down by 0.7%, while the Dow Jones Industrial Average and the Nasdaq Composite fell by 0.8% and 0.4%, respectively.
A crisis of confidence is creeping into the banking sector, with stocks of several regional banks falling, including Los Angeles-based PacWest Bancorp (PACW), which dropped by 50%, and Phoenix-based Western Alliance Bancorporation (WAL), which fell by 38%. These losses raise concerns about bank sector contagion, which started in mid-March with the collapse of three banks, including Silicon Valley (SVB) and Signature.
PacWest is currently considering its options, including a possible sale, while Western Alliance denied a report that it was for sale.
Cryptocurrency may benefit from the financial crisis
The note on the two-year Treasury yield, a gauge of near-term interest rate expectations, fell 15 basis points to 3.78%, close to its lowest point this year, while the 10-year Treasury yield also slid by roughly 2 basis points to around 3.37% in bond markets.
Anthony Georgiades, co-founder of decentralized layer 1 blockchain Pastel Network, predicts that the financial crisis could lead to the U.S. Federal Reserve’s urgent rate cuts and a return to quantitative easing.
Otherwise, the banking sector and the economy could be in deep trouble, which could buoy BTC. Senior market analyst for foreign exchange Oanda, Edward Moya, wrote in a Thursday note that
BTC was not receiving the same amount of flows as it did early during all the banking drama with SVB.