Bitcoin to see “increased demand” in coming weeks

15 Mar 2023

Although both Bitcoin and Ether exceeded the respective $26,000 and $1,770 marks on Tuesday, the joy was short-lived. Investors initially seemingly rebuffed the long-term impact of a regulatory crackdown on crypto-friendly banks and US consumer price index (CPI) data indicating an inflation slowdown in the coming months. 

However, the world’s two largest cryptocurrencies both fell as much as 5% on Wednesday from Tuesday’s highs before progressively stabilising, CoinDesk reports. In early Asian trading, Bitcoin was just under $25,000, while Ether was trading marginally above $1,700.

The recent volatility led to losses of more than $140 million in Bitcoin futures and $80 million in Ether futures, the report adds. As 58% of futures losses stemmed from bets against price rises – shorts – whilst the remainder was from bets on price increases – longs – both short-sellers and long traders were impacted almost equally.

Whereas many analysts said, the recent price action was a result of investors looking for alternatives following the collapse of Silicon Valley Bank.

“Bitcoin’s rally to a new yearly high as Silicon Valley Bank falls and inflation remains stubborn shows that investors are looking to Bitcoin for stability in highly uncertain market conditions,” said Alex Adelman, co-founder of Bitcoin rewards app Lolli.

“While many have looked to Bitcoin as a hedge against inflation and tracked its price moves accordingly, Bitcoin’s relationship to traditional finance is more complex,” Adelman said, going on to add that Bitcoin worked as an “alternative to the traditional financial system at large.” 

“Weakness across the banking sector has heightened investor awareness of Bitcoin’s unique value proposition. In the coming weeks, we will continue to see increased demand for Bitcoin as a superior system for holding and moving money securely,” he continued.

DeVere CEO and founder Nigel Green echoed this: “Investors are looking for alternative currencies, such as cryptocurrencies. Moving forward, these will increasingly compete with traditional fiat ones, and this will help trigger the decreasing dominance of currently leading international currencies.

The banking sector crisis and the emergency measures being implemented by the US government to quell fears of contagion only appear to have fuelled investors’ optimism in crypto as the future of money.”