Bitcoin has reached a new high not seen in approximately nine months, topping $28,000 for the first time since June 2022.
The surge is attributed to the turmoil in the global banking sector, concerns over hotter-than-expected inflation data, and renewed hopes for a dovish Federal Reserve.
Since the beginning of the year, Bitcoin’s price has risen by almost 70 percent, with other digital assets, including Ethereum, Solana, and Cardano, also rallying.
Despite the fluctuation of broader markets in the past week, Bitcoin remained steadfast and continued to rise amidst high levels of uncertainty in markets.
The digital asset is correlated with liquidity conditions and real rates, which have both declined, leading some experts to believe that a new regime is on the horizon.
Investors have called on the Federal Reserve to pause interest rate hikes amidst renewed concerns over Credit Suisse and a handful of US lenders that failed last week.
However, midweek US government data showed that core CPI advanced more than expected, a reminder that the fight against inflation is far from over. It is unclear how the central bank will respond to these conflicting signals at this week’s Fed meeting.
Despite internal strife in the digital asset space, Bitcoin rose as investors sought a hedge against inflation. Last year’s evidence to the contrary did not deter Bitcoin bulls who see the digital asset as a safe haven.
The correlation between the digital asset and the S&P 500 has dissipated this month, with Bitcoin continuing to rise even as the S&P 500 dropped by 1.1 percent on Friday. As a result, more investors are turning to Bitcoin as a viable investment option.