- Bitcoin and gold are hedges to the bank crisis
- Bitcoin’s upcoming halving has led to increased investor focus
Despite regulatory issues and crises in traditional finance, the cryptocurrency market has demonstrated strong results over the last month, and Bitcoin (BTC) has been a solid gainer, JPMorgan stated in a recent research report, cited by CoinDesk.
Crypto’s strength reveals weaknesses in traditional finance
The flagship crypto and gold have both gained, leading JPMorgan analysts to view them as hedges to the bank crisis. The series of recent bankruptcies revealed the vulnerabilities of the traditional financial system considering how susceptible the institutions are to bank runs, according to analysts.
The report states that crypto supporters see the bank crisis in the US and the major shift from deposits to money market funds in the country as a “vindication of the crypto ecosystem.”
The positive effects of Bitcoin ordinals, halving
Bitcoin ordinals were launched two months ago. According to some, these will raise transaction fees and miners will start making more money.
Bitcoin’s upcoming halving has led to increased investor focus. According to JPMorgan, this is where the most critical support for Bitcoin comes from. The event, which involves cutting mining rewards in half, is scheduled for April next year.
The positive effect will come from doubling the crypto’s production cost to around $40,000. This cost has traditionally served as an effective lower price limit.
Coinbase: Crypto markets are resilient
At the end of March, Coinbase stated that cryptocurrency markets were showing resilience in the face of multiple bank crises, and this was especially true for Bitcoin. In a research report, the US’ biggest crypto exchange noted that Bitcoin had been outperforming other assets for at least six weeks.
The dominance of the biggest cryptocurrency by market cap as a percentage of the total cap rose to 47.7%, up from 44% the previous month. Coinbase reported that the outperformance had sped up in early March, the same time bank turmoil started in theUS. They stated:
Part of the reason is that the stress in the banking system reinforced Bitcoin’s store-of-value properties. Because BTC mainly exists outside of the traditional financial system, it offers a hedge against current conditions.
