As a seasoned crypto investor who lived through the 2023 banking crisis, I can confidently say that Bitcoin’s current rally is reminiscent of those tumultuous times. However, instead of fear and panic, this time it’s all about excitement and anticipation. The way BTC is surging towards $90,000, one might think we’re in a gold rush… a digital gold rush!
Bitcoin’s surge continues unabated, approaching nearly $90,000, marking its strongest weekly performance since the 2023 U.S. banking crisis – a significant milestone for this digital currency.
On November 11, the price of Bitcoin (BTC) reached an all-time high of $85,000 momentarily. However, it’s essential to note that this was a brief halt in its journey. At present, 8:14 am UTC, Bitcoin is being traded at $88,879 according to CryptoMoon data. Over the past week, its value has increased by more than 29%.
As a researcher, I find it noteworthy that Bitcoin’s recent weekly return of nearly 30% marks its strongest seven-day performance since the US banking crisis in 2023, as per Vetle Lunde, the head of research at K33 Research. In his Nov 12 post on X, he elaborated on this significant surge in Bitcoin’s value.
“Bitcoin has seen its best 7-day return since the U.S. banking crisis on March 18, 2023. Bitcoin’s market cap has grown by a staggering $413bn in the past week!”
In simple terms, the financial crisis in March 2023 led to the unexpected failure of Silicon Valley Bank and the voluntary dissolution of Silvergate Bank. Signature Bank was subsequently ordered to shut down by New York authorities on March 12, just two days after Silvergate’s liquidation.
Last year’s chaos served as the trigger for Bitcoin‘s surge in price, as stated by Arthur Hayes, co-founder and former CEO of BitMEX.
Bitcoin price on track to $1 million due to Trump’s quantitative easing — Hayes
Since Donald Trump’s victory in the 2024 U.S. presidential election, Bitcoin has experienced a significant surge. This upward trend is fueled by increasing investor optimism, as they expect to see more pro-business and innovative regulatory policies under the world’s largest economy.
As an analyst, I find it intriguing that Donald Trump’s economic policies might potentially propel the value of Bitcoin beyond the $1 million threshold, as suggested by Hayes in his November 12 blog post.
“It took $4 trillion to decrease the debt-to-nominal GDP ratio from 132% to 115%. Let’s say the US reduces it further to 70%, which is where the ratio was in September 2008. Just using a linear extrapolation equates to $10.5 trillion of credit that must be created to accomplish this deleveraging. This is how Bitcoin goes to $1 million because prices are set on the margin.”
As U.S. credit continues to rise, more investors might seek out secure investment options such as Bitcoin, according to Hayes’s perspective.
“As the freely traded supply of Bitcoin dwindles, the most fiat money in history will be chasing a safe haven from not just Americans but Chinese, Japanese, and Western Europeans. Get long, and stay long.”
In simpler terms, quantitative easing is a type of financial strategy used by central banks. Instead of setting interest rates, they buy a specific quantity of government bonds, which increases the money supply and helps boost economic growth by providing more funds (liquidity) to businesses and individuals.
Central bank liquidity injections frequently stimulate the increase of Bitcoin’s value, as they prompt investors to explore profitable opportunities beyond traditional assets in search of higher yields.
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2024-11-12 12:03