The Bitcoin (CRYPTO: BTC) price is up 3% in the past 24 hours and a whopping 28% since this time last week.
At the time of writing, Bitcoin is trading for US$28,036 (AU$40,465).
That puts the worldâs top crypto up some 69% so far in 2023.
And itâs not just the Bitcoin price thatâs shooting the lights out this past week.
Ethereum (CRYPTO: ETH), the worldâs number two crypto by market valuation, is up 12% since last Monday.
One Ether is currently trading for US$1,783.
Whatâs driving the Bitcoin price higher?
The Bitcoin price looks to be getting some solid tailwinds on two fronts.
First, there’s the past week’s succession of banking failures that commenced in the United States with Silicon Valley Bankâs collapse and spread to Europe to Credit Suisse and others.
As you may be aware, Bitcoin was born in the wake of the global financial crisis. Satoshi Nakamoto (the name used by the cryptoâs founder or founders) wrote the white paper that launched the token when trust in the global financial system was at a low point.
Now that trust is again being tested.
âAn environment where higher interest rates after a period of hyper-low interest rates are creating bank runs is about as perfect a Bitcoin use-case as one can think,â CEO of FRNT Financial Stephane Ouellette said (courtesy of Bloomberg).
The Bitcoin price also looks to be benefiting from investor expectations that the global banking woes will force the US Federal Reserve and other central banks to ease off their aggressive rate-tightening paths.
âGiven the uncertainty, we are not yet seeing mass retail or institutional inflows into the market,â crypto analyst Noelle Acheson said.
âWhat is moving the market is the shifting liquidity environment,â she added, noting âexpectations are consolidating around a much lower rate-hike ceiling than expected even a week ago. That environment is good for risk assets, and especially Bitcoin which has no earnings or credit vulnerability.â
Proceed with care
While some crypto investors have made tidy profits, many have been stung by leaping in when FOMO strikes.
While the Bitcoin price could continue to march higher from here, it could also head in the other direction.
Remember, even after this yearâs remarkable rally, Bitcoin is still down more than 59% from its all-time high of US$68,790 reached on 10 November 2021.
Invest with care.
The post Bitcoin price rockets 28% in a week amid âperfect use caseâ appeared first on The Motley Fool Australia.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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