As the crypto market was rocked by the failure of Silvergate and Signature, opinions varied on the impact of these events. Barney Frank of Signature dubbed it an anti-crypto message, while Josef Tětek of Trezor saw it as a positive for Bitcoin.
In the midst of this turmoil, the BTC dominance rate has climbed to a nine-month high of 45.5%, with the last time it reached such heights being June 25, 2022.
This increase is consistent with historical trends, as BTC tends to be viewed as a more stable asset in times of market stress.
BTC’s recent market gains have been accompanied by a notable surge in its price, which has surpassed $26,000 for the first time since the summer of the previous year.
This remarkable rise was prompted by the release of mildly favorable consumer price index data for February, which triggered a ripple effect throughout the entire crypto market.
Despite experiencing a slight dip over the past 24 hours, BTC has been trading above $24,700 and has seen double-digit growth from its price levels during the previous weekend.
Potentially Positive for the Crypto Market
A bitcoin dominance run is typically viewed as a positive sign for the crypto market since it suggests that the market’s excessive speculation is kept in check.
As crypto traders favor investing in bitcoin over more speculative altcoins, it indicates that market froth is relatively low.
The recent turmoil in the US banking industry has brought about several positive implications for Bitcoin, according to a Trezor executive.
Following a series of shocking events, including the shutdown of banks like Silicon Valley Bank along with Signature, Bitcoin has broken the $26,000 price level, marking the biggest gains of the year so far.
Trezor Bitcoin analyst Josef Tětek suggests that this sharp rise in Bitcoin’s price, which is the fastest seen in 2023, is a direct consequence of the perceived vulnerability of the banking system.
The ongoing crisis in the banking industry has apparently contributed to a surge in interest in Bitcoin, which has historically been considered a more stable asset in times of market stress.
As Bitcoin continues to gain ground, it is becoming increasingly clear that it is not only a viable alternative to traditional financial institutions but also a promising store of value.
As a result, it is expected that Bitcoin’s market share will continue to rise as more and more investors turn to cryptocurrency as a safe haven during times of economic uncertainty.
Could Bitcoin be a Safe Haven
Tětek has indicated that the ongoing banking crisis may potentially position Bitcoin as a safe haven and risk-off asset.
He highlighted that Bitcoin was created shortly after the world’s encounter with the 2008 financial crisis and was probably a reaction to the inequity of bailouts.
He stated that the current events serve as a timely reminder of why Bitcoin is essential. Tětek remarked that although the present circumstances may not be favorable for many centralized crypto businesses and assets, it is definitely good news for Bitcoin.
Furthermore, he stressed that this is not a favorable environment for any kind of custodian, and reiterated that self-custody assets are one of the safest options available.
While Tětek from Trezor suggests that the ongoing banking crisis in the US could be positive for Bitcoin, Signature Bank’s board member and former US Congressperson Barney Frank hold a different opinion. He argues that the latest banking events are linked to crypto.
Final Thoughts
Frank stated that regulators intended to convey a powerful anti-crypto message, asserting that the problems at Signature Bank were purely contagion from SVB.
While there is no telling what the future of bitcoin and crypto in particular holds, it seems like things could be heading in a positive direction. Plus, the fact that bitcoin is not as vulnerable as regular cash makes it a viable option for the future.