Troubles Swirling Around Banks Are Encouraging Bitcoin Fans To Aim For $30,000

Following a stunning rally in recent days amidst unrest in the international banking system, Bitcoin supporters are now focusing on the coin's next significant milestone: $30,000.

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Since March 8, when the first indications of difficulty around Silicon Valley Bank initially surfaced, the biggest digital coin has increased by about 25%. Silicon Valley Bank has now failed, causing unrest among other lenders. Since the beginning of the month, the digital currency has increased by more than 20%, trading at over $28,000, its highest level since June of last year, when a string of explosions within the digital assets area itself shook the market and pushed prices higher. In June, during the collapse of the now-bankrupt lender Celsius, it last traded at $30,000. 

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Some keeping track of its recent ascent speculate that some investors may be finding solace in the fact that Bitcoin as well as other digital assets are beyond the control of authorities and the financial system, in some ways shielding them from problems impacting the larger banking industry. 

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Chuck Cumello, president and chief executive officer of Essex Financial Services, said that intellectually, you could understand the appeal of not having to worry about the Fed entering the market. However, that was one of its siren songs, one of the things that drove and brought attention to it, and I'm not surprised in any way, shape, or form that it's up in this kind of environment, he continued. "That's not to say that Bitcoin doesn't have a variety of other problems that the average individual should be worried about," he said.

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Investors are on the alert for any more lenders that might still be impacted as regulators attempt to contain the current episode's effects, which have already touched three US institutions: Silicon Valley Bank, Silvergate Capital Corp., and Signature Bank. The lack of confidence has now expanded to Europe, as demonstrated by the weekend agreement by UBS Group AG to acquire Credit Suisse Group AG for more than $3 billion in a deal facilitated by the government. Market observers claim that everything is causing Bitcoin to rise.

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Dessislava Aubert and Clara Medalie's Kaiko team wrote, "Bitcoin is on an incredible rip. "During the past week, market sentiment has experienced a remarkable turnaround, supported by a continuing financial meltdown that has strengthened investors' first perceptions of crypto." 

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Since the FTX collapsed towards the end of last year, according to research from the company, crypto trading volumes have increased to their highest level.

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Other alleged qualities of bitcoin have also been cited by proponents as reasons to hold the coin in this situation, including the possibility that it may be used as an inflation hedge due to its finite supply. The validity of that claim has nevertheless been tested during the last two years, during which time the cost of living has drastically grown and the value of the coin has fallen by more than 50%. 

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Whatever the reason, the coin has been rising, like with others, with the $30,000 mark still being crucial for the biggest token. Round numbers, if anything, seem to be psychologically significant to investors. The founders of Three Arrows Capital mentioned the $30,000 threshold as a sticking point for their fund once the token's price fell below it in an interview with Trade Algo.

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Nevertheless, Matt Maley, chief market analyst at Miller Tabak & Co., notes that due to its fast upswing, Bitcoin is selling in technically oversold levels, which may make it more challenging for it to cross the key threshold. 

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"In the past, Bitcoin was an asset that fluctuated with liquidity movements. I believe the action has more to do with additional liquidity than investors viewing Bitcoin as a flight-to-safety asset because the Fed infused money last week with this crisis, said Maley. "It's growing overbought, so once this crisis settles, Bitcoin will have a hard time breaching above $30k."

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According to Mr. Fridman, he is collaborating with a seller in Beverly Hills' Trousdale Estates neighborhood who is getting ready to lower the price on his nearly $20 million property. He claimed the seller is certain he can make up the shortfall when he buys his next house, which will be substantially more expensive, using the money saved.

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Also, Mr. Fridman recently cut the price of a freshly built 17,000 square foot mansion he is marketing for the development firm Viewpoint Collection from $42.5 million to $36.95 million from the original April 2022 asking price of $47.5 million. It's a lot, but the seller only wants to signal that we're prepared to complete the transaction, according to Mr. Fridman.

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The drop in prices also corresponds with a widespread reevaluation of some of L.A.'s most opulent mansions' perceived value. A number of homes that originally aspired to break price records have traded for much less during the past year, sometimes in difficult conditions. The One, a Bel-Air megamansion that was previously expected to list for $500 million but instead sold for $126 million at auction after its developer, Nile Niami, fell out with his bankers due to cost overruns and delays, was the most notorious case in point.

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A bankruptcy judge approved the $47.5 million purchase of a Bel-Air megamansion built by renowned botox specialist Alex Khadavi in May 2022. Khadavi had originally asked for $87 million. After overspending on the construction of the home, which featured a D.J., Dr. Khadavi lost control of the project. a Champagne tasting room, an NFT art exhibition, and a booth.

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According to Mr. Umansky of The Agency, a number of variables came together to cause sharper cuts during the past three months. The mansion tax, which was authorized in November 2022, is intended to raise money for the homeless. Property transactions between $5 million and $10 million will be subject to a 4% tax, and sales of properties over $10 million will be subject to a 5.5% tax.

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The tax, according to agents, has dominated conversations with their sellers. Mr. Elliott claimed that when Mr. Cueva and Mr. Hallo relisted their hilltop home at a discount, they took it into account.

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In order to meet the tax deadline, a client of real estate agent David Solomon of Douglas Elliman who had been considering selling their Brentwood house ultimately decided it was best to move immediately. This month, the client sold the house to Formula One heiress Petra Ecclestone & her husband, Sam Palmer, in an off-market deal for $30.5 million.

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A new proposed regulation that would restrict the building of the megamansions that have come to characterize the Los Angeles luxury market in recent years, according to Ms. Williams of the Beverly Hills Estates, would have an impact on valuations as well. The ordinance would mean new requirements on lot coverage, grading, heights, and landscape design for new housing and affect the hilly societies in some affluent enclaves, including the Hollywood Hills, Bel-Air, Beverly Crest, and Laurel Canyon. The ordinance is intended to protect bio - diversity and feral creatures in the Santa Monica Mountains. Ms. Williams claimed that even though the legislation hasn't been enacted, it has already had an impact on the value of properties which would make them attractive to developers.

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She claimed that, in contrast to a few years ago, when spec housebuilders drove up the price of plots all around Los Angeles, she has observed fewer developers looking at potential building sites. "Developers no longer actually purchase. There are too many limitations, she said.

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According to Mr. Umansky, purchasers at the ultrahigh end of the market, like those in other segments, have been alarmed by rising interest rates, worries about a recession, and the conflict in Ukraine. He asserted that the common misperception that the wealthy don't use loans to purchase properties.

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Yet, not everyone is eager to negotiate at a deep price. A buyer who tried to lowball Malibu developer Scott Gillen for a residence at The Case, his blufftop property overlooking the Pacific Ocean, was recently turned away, according to Gillen, who is promoting a collection of properties in the region. After years of marketing efforts, Mr. Gillen has only succeeded in selling one of the five homes in the project that is still under construction. According to Mr. Gillen, the buyer made a $50 million offer for the home, which had a $69.995 million asking price. We need to bargain, but we won't reduce our asking price by $20 million, Mr. Gillen added. "We're not selling to the bottom feeder," someone said.