Bitcoin’s value has recently increased following developments in the banking crisis in the United States. The announcement of a $30 billion aid package by 11 major US banks for First Republic Bank, coupled with the rise in the Federal Reserve’s balance sheet, may have played a role in the appreciation of Bitcoin.
In response to the news of the aid package for First Republic Bank, the crypto market reacted positively. However, Bitcoin’s price fell to $23,000 levels due to the crisis in the banking sector spreading to Europe and the difficulties experienced by some European banks, particularly Credit Suisse.
Bitcoin’s value had initially returned to the same level as the day of the inflation figures’ announcement in the United States three days ago. Investors viewed the decrease in inflation from 6.4% in February to 6% as a positive development.
The upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 21-22 is expected to be a critical time for Bitcoin’s value. Following the meeting, the Federal Reserve will announce its interest rate decision, and Fed Chairman Powell will respond to questions. Powell’s statements will be essential for the future of cryptocurrencies, including Bitcoin.
While experts anticipate a 25 basis point increase in interest rates by the Fed, the possibility of no increase remains low. The liquidity needs of the US markets and the challenging situation faced by banks could lead to the Fed ending its tightening policy earlier than expected. In such a scenario, investments in limited assets such as Bitcoin, gold, and silver could significantly increase.
