Bitcoin Nears $29,000 – What’s Behind the Recent Price Surge?
Bitcoin's price has recently surged to $28,800 after a brief cooldown from the recent bullish trend.
The reason for this uptick is not entirely clear, although some speculate it could be due to momentum from shifts in sentiment.
According to the Economist, half a trillion dollars seems to be missing from the commercial banking system, likely due to reverse repos.
Notably, several banks that held nearly $1 trillion in deposits collapsed or were acquired. Around $300 billion of this was held by Silicon Valley Bank and Signature Bank, with Credit Suisse holding an additional $600 billion.
These are bank accounts at the Federal Reserve Banks that commercial banks can only access, but money-market funds may be able to access them by directing commercial banks to send their funds to the repos.
READ MORE: Bitcoin’s Potential Reaction to the Federal Reserve’s Decision on Interest Rates
The Fed pays 4.5% interest for deposits in reverse repos, which has led to holdings increasing above $2 trillion. It is unclear if this has caused a deposit crunch, especially since the Fed plans to increase interest rates by 0.25% soon.
Despite this, the overall market is slightly green, with Nasdaq gaining 0.14%. The dollar strength index has decreased to 102 from 105, while the euro has risen from nearly $1.05 to almost $1.08 following the Fed’s slowdown in rate hikes.
Overall, it is unclear if any specific news has led to Bitcoin’s recent price increase.
At the time of writing BTC is trading at $28,700 with a $27.85 billion volume after a 2.3% increase in the past 24 hours.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
