Bitcoin has surged to a 9-month high amid the banking turmoil in the United States. The flagship cryptocurrency is up by 50% since the beginning of 2023, trading at $27,779 at the time of writing this report.

Investors King earlier reported that the crypto mobile applications also increased by 15 per cent due to the uncertainty surrounding the US banking sector following the collapse of three big banks in the United States. It would be recalled that Silvergate, Signature and Silicon Valley Banks were shut down last week due to issues related to liquidity. 

Investors and crypto experts have extolled the resilience of Bitcoin amid the banking crisis last week. They noted that bitcoin is trading at its lowest correlation to stock in months. Thereby making the most capitalised cryptocurrency a valuable alternative asset. 

For instance, the Head of Ark Investment, Cathie Wood said “Indeed, during the last week, crypt assets behaved like safe havens: along with gold”. 

Meanwhile, Bitcoin continued to hold firm during the early trading hours on Tuesday (today) while other crypto assets were trading lower. Traders across the globe are looking at the US Federal Reserve’s interest rate hike as its two-day FOMC meeting begins today. 

Similarly, there has been an additional confidence boost in the global banking sector following Sunday’s announcement that Swiss banking giant UBS agreed to buy its crisis-hit rival Credit Suisse in an emergency deal worth over $3 billion.

Several largest central banks, including the Federal Reserve, the Bank of England, and the European Central Bank, also came together on Sunday to announce “coordinated action” to enhance liquidity in their standing U.S. dollar swap arrangements.

Interestingly, experts have predicted that bitcoin would benefit from central bank efforts to bolster liquidity in the global financial system. Bitcoin rose to a record of $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.

Cryptocurrency mobile applications experienced a surge in downloads as Americans look to diversify their investments following the crisis that rocks U.S. banks in the past few weeks. 

A report by Apptopia revealed that the top 10 crypto mobile applications saw a rise of 15% since the collapse of Silicon Valley Bank.

Coinbase, Crypto.com, Trust, Binance, Bitcoin Crypto DeFi Wallet, Blockchain.com, KuKoin, Kraken, eToro and BitPay were the top 10 crypto apps listed in the United States.

Investors King understands that the increase in crypto mobile app downloads was a result of the uncertainty surrounding the U.S. banking sector following the collapse of three leading banks last week.

Also, another contributing factor was global happenings like the crisis in Credit Suisse, the second-largest bank in Switzerland and one of the largest in the world. Last week, the Swiss national bank injected $54 billion into the failed bank before it was finally acquired by UBS, the largest bank in the country earlier today in about a $3 billion deal.

Despite the unregulated nature of the cryptocurrency space, retail investors and institutional investors are now looking to risk it all ahead of the Bitcoin halving expected to take place in May 2024.

Bitcoin halving is a process where Bitcoin reward is halved every 4 years. The process reduce bitcoin supply while demand remained constant and simultaneously bolstered the value of the digital asset.

It is important to note that top ten banking apps in the U.S. surveyed during the same period experienced a 5% decline in mobile downloads. This includes banks like Capital One, Chase, Bank of America, Wells Fargo, and Citi bank among others.

Meaning capital inflow into the cryptocurrency space will continue to increase into 2024, especially with the Fed and other central banks expected to continue to raise interest rates to manage rising inflation.

According to CoinMarketCap, cryptocurrency’s total market capital rose by 8.3% to $1.1 trillion during the surveyed period while Bitcoin and Ethereum value grew by 15% and 9%, respectively. Another evidence of rising demand for unregulated digital assets.

Amid the collapse of three banks in just two weeks, Cardano’s founder, Charles Hoskinson has stated that the crypto industry needs to sever relationships with traditional banks.

He started this in a series of tweets puts out on Thursday. 

Hoskinson’s opinion comes as a result of the ongoing crisis and the collapse of about three reputable financial institutions, of which the most recent is the collapse of the New York-based Signature Bank.

The Cardano Chief added that crypt banks should be digitized, stating that once that happens, it would mean the end for the traditional banking sector. Hoskinson worries that crypto-focused firms are too dependent on traditional banks.

Investors King earlier reported that crypto firms are beginning to have difficulty finding partnering banks for their services after three of America’s leading financial institutions, Silvergate Capital, Silicon Valley Bank, and Signature Bank were shut down by regulators earlier this month, propelling severe losses for numerous crypto-focused firms.

Most prominent among the affected crypto-focused firm is Circle, the producer of USD stablecoin which had $3.3 billion stuck in Silicon Valley Bank. This caused USDC to plunge to as low as $0.87 before rebounding to its true value of $1 value. 

Similarly, crypto exchange Coinbase said it held $240 million in corporate cash at Signature Bank, while Paxos had $250 million exposure to the same bank.

Meanwhile, a number of crypto experts and enthusiasts have extolled the crypto market and the industry in general for its resilience in the past weeks amid a series of negative events involving the collapse of three giant banks. 

The flagship cryptocurrency had exploded above $26,000 on Monday after US President, Joe Biden assured that the banking system is “safe”. 

“Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you we will not stop at this; we’ll do whatever is needed. Your deposits will be there when you need them”. Joe Biden said in a brief televised statement from the White House.