• The banking crisis following SVB’s collapse is causing the market to price in lower interest rates much sooner than previously expected.
• Analysis from CryptoQuant analyst Cristian Palusi suggests that the liquidity crises now plaguing commercial banks may be a “long-awaited buy signal” for Bitcoin.
• Gold and Bitcoin have been on the rise, with gold surging to nearly $2000 and Bitcoin reaching a 9-month high of $27,000.
Banking Crisis Sets off Alarm Bells
The banking crisis following SVB’s collapse has the market pricing in lower interest rates far sooner than previously expected. Markets are starting to price in an incoming Fed pivot as bank instability forces central banks to protect the financial system. Implied federal funds‘ policy rates have severely shortened their time frame for when they think the central bank will first cut rates again, from Q1 2024 to June 2023.
Crypto Market Reacts Positively
Gold and Bitcoin are both on the rise: the precious metal surged to nearly $2000 as of Friday, while its oft-considered digital successor rose to another 9-month high of $27,000. Coinbase (COIN) has risen over 37% over the last 5 days, and is known to be tightly correlated with the crypto asset market that it enables trades for.
Analysis Suggests Buy Signal
CryptoQuant analyst Cristian Palusci suggests that this liquidity crises now plaguing commercial banks may be a „long-awaited buy signal“ for Bitcoin due to higher premiums being seen after USDC depegged.
Fed Pivot May Be Near
The banking crisis is forcing central banks to take action and protect the financial system by pivoting away from previous plans regarding monetary policy. This could mean a near future where interest rates are lowered much quicker than previously expected – a move that could potentially benefit crypto assets such as Bitcoin even further due to higher demand resulting from lower yields elsewhere in traditional markets.
The recent developments suggest that investors should keep an eye out for potential opportunities within crypto markets due increased demand resulting from looming Fed pivots caused by banking instability – which may be providing us with long awaited buy signals for Bitcoin and other cryptocurrencies alike.