Bitcoin Soars 30% Over the Week as Global Banks Roil

After smashing through the $28,000 mark on Sunday, Bitcoin (BTC) hit the year’s high of $28,503 on Monday morning before a slight correction to $28,375 at the time of writing, according to data from CoinGecko.

The latest price action means the leading cryptocurrency is up 4% in the day, and as much as 28.4% over the last week, making it one of the best performers in the market.

Bitcoin last changed hands at these levels in June last year amid the collapse of the Terra ecosystem and the contagion starting to spread across the crypto industry to claim the scalps of several key players, such as Celsius Network and Three Arrows Capital, among others.

The latest rally also means that the price of Bitcoin surged about 70% since the start of the year.

Global banks in turmoil

Bitcoin’s impressive performance is a stark contrast to major bank stocks that have continued to plummet following the collapse of Silicon Valley Bank and Signature Bank earlier this month.

There was additional pressure on the global banking sector following Sunday’s announcement that Swiss banking giant UBS agreed to buy its crisis-hit rival Credit Suisse in an emergency deal worth over $3 billion.

Several largest central banks, including the Federal Reserve, the Bank of England, and the European Central Bank, also came together on Sunday to announce “coordinated action” to enhance liquidity in their standing U.S. dollar swap arrangements.

The goal is to ease access to U.S. dollar liquidity in times of crisis. Still, Credit Suisse's stock plunged nearly 60% in morning trade Monday, while UBS was down 7%.

New price targets for Bitcoin

Amid the banking chaos, Bitcoin has soared, prompting enthusiasts to once again promote the leading cryptocurrency as a “safe haven."

Commenting on the collapse of SVB and the Signature Bank, Cathie Wood of Ark Invest said last week that “this debacle would not have been possible in the decentralized, transparent, auditable, and over-collateralized crypto asset ecosystem."

“Indeed, during the last week, crypt assets behaved like safe havens: along with gold, their prices appreciated,” she said.

Matrixport head of research Markus Thielen has meanwhile said that the firm is reassessing its price targets for the leading cryptocurrency.

“We are adjusting our near-term price target as our previous target of 28,000 has been reached. The new Bitcoin price target is 36,000 by summer 2023,” Thielen wrote in the latest note.

Thielen added that the $45,000 target by the end of the year “looks quite plausible now.”

The Matrixport researcher also noted that while both Bitcoin and Ethereum are trading above the 50-day moving average, which is “bullish,” Ethereum underperforms Bitcoin with the ETH-to-BTC ratio going down.

“Crypto is driven by beta factors, and there is a macro liquidity story developing that has been historically very powerful for Bitcoin,” said Thielen.

Ethereum, the second-largest cryptocurrency, has dropped some over the day, but still soared 13% on the week, changing hands just below $1,800 by press time.