The leading cryptocurrency, Bitcoin, saw a 1.6% increase in price, hitting an intraday high of $28,621 on the Bitstamp platform.
On Tuesday, regional banks’ stock prices continued to decline. This is probably what caused Bitcoin’s most recent price increase.
At the time of publication, dropping shares of PacWest Bancorp, Western Alliance Bancorp, KeyCorp, Comerica, and Zions Bancorp contributed to the KBW Regional Banking Index’s (KRX) most recent 4.4% decline.
Shares of PacWest Bancorp fell by 16.4%, while those of Western Alliance Bancorp fell sharply by 24.6%. With KeyCorp down 8.8%, Comerica down 8.9%, and Zions Bancorp down 7.3%, other regional banks also had big drops. Concerns concerning the stability of the regional banking industry have been raised as a result of the drop in regional bank shares.
This comes after authorities helped the banking giant JPMorgan Chase close a deal to acquire the struggling lender First Republic.
After its meeting on Wednesday, the Federal Reserve is anticipated to announce a quarter-point increase in interest rates. The financial markets, particularly the cryptocurrency industry, are expected to be further impacted by this predicted surge.
As investors look for alternative assets to protect themselves against potential economic volatility, the rise in the price of Bitcoin can be seen as a reaction to the uncertainty surrounding the traditional banking system.
It is unclear whether Bitcoin will be able to retake the $30,000 milestone as the market struggles with the effects of the JPMorgan Chase-First Republic merger and the expected interest rate increase.
