The crypto market continued to rise on Friday despite tense stock market sentiment. Bitcoin, the largest digital currency by market value, rose to $27,025 on the Bitstamp trading platform. This is the highest level since June. Since the beginning of the week, the price has increased by around a quarter.
Other crypto assets such as ether also gained at the end of a tumultuous week. The market value of all nearly 23,000 cyber currencies was around $1.14 trillion.
Notwithstanding the recent gains, the crypto market has been weighed down this week by the banking turmoil in the US and Europe. However, the setbacks were much more moderate than, for example, on the stock markets or for some classic currencies. This is unusual, given that digital assets are among the most volatile financial stocks. Cryptocurrencies, on the other hand, were significantly impacted by the problems at the crypto bank Silvergate at the beginning of March.
Bitcoin and Co recently received support from the significantly lower capital market interest rates, which also fell on Friday. “The prospect of a more cautious monetary policy by the central banks on both sides of the Atlantic acts as a tip of the scales in the future,” said crypto expert Timo Emden.
Due to the problems in the banking sector, interest rate expectations of central banks have fallen significantly, which has pushed down market interest rates. In the USA, there has even been speculation that the US Federal Reserve could start cutting interest rates later in the year. This also contributed to the general decline in yields.
Lower interest rates usually benefit risky asset classes like digital currencies because safer assets like government bonds then pay less interest.
