Bitcoin surges 9% toward key level of $30,000 as crypto market rallies amid fresh banking sector fears
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- Bitcoin surged as much as 9% on Wednesday, nearing the important $30,000 level.
- The rally comes as First Republic Bank stokes fresh fears over weakness in the banking sector.
- Investors are also adding risk as they anticipate a Fed pivot, a crypto exec told Insider.
Bitcoin jumped as much as 9% on Wednesday, nearing the key price level of $30,000, as banking sector concerns re-emerged.
First Republic Bank stock nosedived almost 50% on Tuesday and lost another 20% Wednesday, hitting a record low, after reporting higher-than-expected customer deposit withdrawals.
Worries were heightened after Bloomberg reported that the regional bank is in talks for a rescue plan that could involve $100 billion in asset sales.
Bitcoin rallied through the turmoil in March as Silicon Valley Bank failed, and industry observers said a similar situation is playing out for the world's largest crypto amid the latest bout of uncertainty.
"BTC is seeing a rally because another public bank, First Republic Bank, crashing, has re-stimulated the narrative of 'not your keys, not your money,' leading more and more people to realize the beauty and reliability of bitcoin [and] crypto's decentralized peer-to-peer cash system," Youwei Yang, chief economist at crypto mining company BTCM, told Insider.
Bitcoin's rally Wednesday ended a five-day losing streak. The token's been on a tear in April and 2023 broadly, hitting 10-month highs earlier this month to nearly $31,000.
Ethereum meanwhile is up 7% in the past day, according to Messari, as altcoins like solana and polygon also jumped 8% and 9%.
Michael Dunn, chief product officer at derivatives exchange operator Bitnomial, told Insider that traders may be "signaling risk-on sentiment, as they anticipate a potential softer Fed policy and potential liquidity injections surrounding First Republic Bank."
Another crypto exec echoed similar sentiments, adding that the slew of bank failures like Silicon Valley Bank last month made investors question the stability of traditional financial services.
Turmoil in the sector has highlighted that "perhaps well-founded blockchain-based systems and cryptocurrencies with solid backing and use could be as good or even better, safer, cheaper and faster to use than the traditional banking systems," Mikkel Morch, chairman at investment fund ARK36, told Insider.