Bitcoin hits nine-month high as investors unfazed by SVB fallout

While bank shares across Ireland and wider Europe fell sharply as the collapse of SVB materialised, Bitcoin climbed to a nine-month high of over €24,700

Crypto investors have been largely unfazed by the collapse of SVB and Signature Bank last weekend, despite their roles as banking partners for a number of large crypto firms. Photographer: Al Drago/Bloomberg

Bitcoin hit a nine-month high on Tuesday, climbing by over 30% since Friday in what analysts have called "growing optimism" among leading cryptocurrencies.

In the past four days, Bitcoin has reached over $26,488 (€24,711) despite turmoil across global financial markets following the collapse of Silicon Valley Bank.

Similar trends have also appeared across other major cryptocurrencies, with Ethereum up 24% since last Friday, climbing to over a six-month high of €1,778 (€1,657). 

While bank shares across Ireland and wider Europe fell sharply as the collapse of SVB materialised, Bitcoin remains in its fourth straight day of gains, climbing steadily back to prices seen before the crypto crash of June 2022.

Bitcoin investors have been largely unfazed by the collapse of SVB and Signature Bank last weekend, despite their roles as banking partners for a number of large crypto firms.

Many leading cryptocurrencies have been kept afloat in recent days by US authorities who announced plans on Sunday to limit the fallout from the collapse of SVB.

Emergency measures were launched to ensure confidence in the banking system after the collapse, with authorities assuring that SVB customers would have access to their deposits from Monday.

According to some analysts, Bitcoin's steady recovery was also largely helped by cooling inflation in the US, which is still rising but at a slower pace than the previous month.

"Recent US CPI data highlights the improvement in economic conditions," said Charles Hayter, CEO of market data provider, Cryptocompare.

Speaking to the Irish Examiner, Mr Hayter said, "As markets rebound, higher beta assets like crypto tend to move much higher, attracting more retail interest as seen in January."

Research analyst at Cryptocompare, Hosam Mahmoud also noted that the SVB collapse may prompt investors to seek less conventional investment routes.

"It is also possible that the fall of SVB and the intervention by government bodies in the traditional banking system has highlighted the value proposition of Bitcoin and other crypto assets - where monetary policy is decided by code and there are no bailouts," Mr Mahmoud told the Irish Examiner.

As the US continues to deal with the fallout, there remains growing uncertainty as to how the Fed will act and if the crypto market, which many investors have turned to for shelter, can weather another hike in interest rates amid an already turbulent environment.