Bitcoin had a tough 2022. Now investors are looking toward 2023 with caution when it comes to cryptocurrencies.
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Cryptocurrencies resumed their rally on Friday, climbing above the $26,000 for the second time this week.
Bitcoin was last higher by 6.8% and trading at $26,709.00, according to Coin Metrics. It’s headed for its best week since January 2021, which was right before the first bull run that year.
Ether rose 3.5% to $1,744.24 and is on pace for its best week since August 2021.
Prices kept climbing even as Dow and S&P 500 futures fell Friday morning, as traders digested the future of Credit Suisse. The bank’s fate continued to weigh on investors even after the embattled lender said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
Yuya Hasegawa, an analyst at Japanese crypto firm Bitbank, said a close above $26,000 for bitcoin could signal the beginning of a bull market.
Investors have welcomed resilient crypto prices amid the banking crisis this week. The week kicked off with the closures of Silicon Valley Bank and Signature Bank late Sunday but attention was on First Republic Bank throughout the week. Late Thursday several large U.S. banks stepped in to aid it with $30 billion in deposits.
Many have suggested bitcoin is undergoing a narrative shift among the banking crisis. The cryptocurrency’s price moves, however, are still heavily influenced by inflation and Federal Reserve rate hikes.
“I still don’t see enough evidence to think the Fed will back off its higher-for-longer stance, even if it stops hiking rates,” said Callie Cox, U.S. investment analyst at eToro. “High rates are tough for speculative crypto to survive in. I also think it’s extra important to understand how your investments make money, and what the risks are. High rates can cull the herd, and the big could get bigger. We’re essentially seeing that happen in the traditional banking system right now.”