Silicon Valley Bank’s loss appears to be Bitcoin’s gain.
The most popular cryptocurrency is up more than 10%, to just under $26,000 over the last day. Bitcoin was trading at $26,500, a nine-month high, early Tuesday before retreating. Ether, the second-leading coin, was up 6%, to $1,747, after paring gains from a seven-month high of $1,773, according to CoinMarketCap.
With Tuesday’s rise, Bitcoin cleared the elusive $25,000 mark that it’s struggled to break and stay above so far this year.
The gains in the crypto market come in the aftermath of Silicon Valley Bank’s collapse and a rush by regulators to backstop deposits. The bank’s failure has caused crypto supporters to declare victory over traditional banks, and tout Bitcoin’s ability to help avoid the type of insecurity faced by startups and other depositors once SVB was closed by state regulators.
This is a historic pump.
Forget the price. On a day when bank stocks are in free fall, #Bitcoin is offering safe harbor to those fleeing debasement and counterparty risk.
Satoshi’s invention is working as intended. pic.twitter.com/9GgNdc3Dtg
— Stack Hodler (@stackhodler) March 13, 2023
Also contributing to crypto’s rise on Tuesday was a slightly cooler inflation increase of 6%, compared with 6.4% in January, that had traders hopeful the Fed would scale back on rate hikes at the agency’s upcoming meeting. The Fed was largely expected to raise rates a quarter or a half of a percentage point before the inflation report and the collapse of Silicon Valley Bank and then Signature Bank over the weekend.
Still, according to Yuya Hasegawa, a crypto analyst at BitBank, the rise in Bitcoin and Ether still depends on a few upcoming news items.
“While the expectation for a pivot in the Fed’s policy has overtaken the investor sentiment, Bitcoin and crypto still have some unresolved agendas such as potential tax on mining energy, KuCoin lawsuit, and whether ETH is a security or not,” Hasegawa wrote in a note.
Fortune‘s CFO Daily newsletter is the must-read analysis every finance professional needs to get ahead. Sign up today.