Bitcoin is having a moment after SVB’s collapse

Like the two Christmases you get after your parents divorce, sometimes an institution collapsing can result in an abundance of spoils. Bitcoin prices climbed as high as $27,293 yesterday, wrapping up the cryptocurrency’s best week since January 2021. And it has Silicon Valley Bank and friends to thank for it.

Why is crypto getting a boost? Crypto diehards claim bitcoin’s gains are the result of people losing faith in traditional banking after SVB and Signature imploded (though it’s worth noting that Signature was a big player in the crypto world).

But there’s another possibility: After the second- and third-biggest bank failures in history, economists started second-guessing whether the Fed would stick to the plan to hike interest rates again or change course protect the rest of the very fragile banking industry. That could mean the crypto market, which slid into the dreaded Crypto Winter in the first half of last year because of macroeconomic factors like the Fed’s rate hikes, might finally be approaching spring.

Looking ahead…the Fed’s interest rate decision next week will likely serve as crypto’s Groundhog Day. And despite the banking industry hoping Jerome Powell pauses the interest rate hikes, February’s inflation numbers showed that the Fed may need to stick to its original plan to keep inflation in check.