Bitcoin rallied Monday to its highest level in 10 months, as some industry proponents touted the asset as a potential “safe haven,” like gold, as recession fears return to the forefront, and after fears rose last month about potential instability in the banking system.
The world’s largest cryptocurrency topped $30,000 Monday night for the first since June 10, 2022, according to Dow Jones Market Data, peaking at $30,321 before pulling back. Bitcoin
has surged 81% year to date, though is still down over 57% from an all-time high in November 2021. Ethereum
also rallied Monday, and was closing in on the $2,000 level for the first time since last August.
“With the bank crisis, I think that the leading feature of bitcoin has changed from speculative tech to safety. A lot more like gold,” said David Tawil, president and co-founder at ProChain Capital. Some investors may have started to view the asset as a haven from the banking turmoil and a recession, instead of a speculative asset, Tawil said.
Still, bitcoin has been often trading in tandem with other risky assets, such as stocks, for the past few years.
“I also believe there will be an influx of liquidity from Asia, especially Asian tech companies who had accounts with Silicon Valley Bank who are now looking for places to put their money,” according to Stefan Rust, founder of Truflation.
The rally on Monday may be partially driven by “the growing influence on the crypto market led by Hong Kong,” while U.S. regulators increase their oversight over the industry, according to Rachel Lin, co-founder and chief-executive at Synfutures.
Hong Kong Financial Secretary Paul Chan said Sunday in a blog post that while crypto markets have been highly volatile, it’s the “right time” to push the adoption of Web3, or the so-called third generation of the internet, in the region.
Bitcoin had been attempting to break the $30,000 level, a psychological level, for three weeks, Rust noted.