'Perfect Use Case' Drives Up The Price Of Bitcoin By 28% In A Week.

The price of Bitcoin (CRYPTO: BTC) has increased by 3% over the past day and by a staggering 28% over the past week.

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As of this writing, one bitcoin is worth US$28,036 (or AU$40,465).

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The leading cryptocurrency in the globe has increased by almost 69% so far in 2023 because to this.

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Over this last week, prices for other commodities have also skyrocketed.

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Ethereum (CRYPTO: ETH), the second-largest cryptocurrency by market capitalization, has increased by 12% since last Monday.

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At the time of writing, one Ether is worth $1,783 USD.

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What is increasing the price of Bitcoin?

The price of Bitcoin appears to be experiencing two strong tailwinds.

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The first is the string of banking failures over the past week, which started in the United States with the fall of Silicon Valley Bank and moved to Europe with Credit Suisse and others.

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As you may know, the global financial crisis led to the creation of Bitcoin. The white paper that debuted the token was written by Satoshi Nakamoto (the alias of the cryptocurrency's founder or founders) at a time when confidence in the world's banking system was at an all-time low.

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It's now being put to the test once more.

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"About as great a Bitcoin utilization as one can envision is a scenario where increased interest rates following a time of hyper-low bond yields are driving bank runs," said Stephane Ouellette, CEO of FRNT Finance (courtesy of Trade Algo).

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Investor predictions that the global financial crisis will force the US Federal Reserve as well as other central banks to scale back their aggressive rate-tightening policies appear to be helping the price of bitcoin.

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Given the uncertainties, Noelle Acheson, a crypto analyst, said that there haven't been many significant institutional or retail inflows into the market.

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She continued, pointing out that "expectations are concentrating around a substantially lower rate-hike ceiling than projected even a week ago." "What is driving the market is the evolving liquidity environment," she said. The current environment is favorable for risky investments, particularly Bitcoin, which has no earnings or credit risk.

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Move cautiously.

While some cryptocurrency investors have profited handsomely, many have suffered the consequences of investing when FOMO strikes.

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The price of bitcoin may move in one of two directions from here: either higher or lower.

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Keep in mind that despite this year's impressive rally, Bitcoin is still fallen more than 59% from its record high of US$68,790 set on November 10, 2021.

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