Bitcoin prices rallied today, setting multiple multimonth highs as the digital currency continued to extend its recent gains.
The world’s most prominent digital currency surpassed $27,300 around 6:15 p.m. EDT, CoinDesk data shows.
At this point, the cryptocurrency was trading at its highest since June and had appreciated roughly 35% in the space of a week, additional CoinDesk figures reveal.
The digital climbed to this level after reaching a prior nine-month high of close to $27,000 around 8 a.m. EDT this morning.
After rising to this multimonth high, bitcoin pulled back slightly, falling below $26,200 within a matter of hours.
However, after suffering this decline, the digital currency resumed its upward trend, exceeding $27,300 this evening.
The cryptocurrency experienced these gains after a rough week where multiple banks suffered failures.
Earlier this month, Silvergate Capital Corporation announced plans to liquidate Silvergate Bank, stating that it planned to return all deposits to account holders.
The troubled lending institution suffered from a wave of account holders withdrawing their funds following the announced bankruptcy of FTX, according to Reuters.
Shortly after this announcement, markets suffered another blow as the California Department of Financial Protection and Innovation shut down Silicon Valley Bank, putting the Federal Deposit Insurance Corporation in charge to assure that individuals and entities holding insured deposits there would get their funds back.
Up until recently, SVB was one of the largest banks in the nation, according to USA Today.
On March 12, investors received the latest round of bank-related news, as the New York Department of Financial Services took control of Signature Bank, which had over $100 billion in assets.
The FDIC became receiver of the financial institution, which had 40 branches in states across the U.S.
The following day, the FDIC announced that account holders could access all deposits held by SVB, regardless of whether they were insured or not.
As a result, the U.S. federal government chose to support $175 billion worth of deposits, a move that has not been without controversy, according to NPR.
Switzerland-based Credit Suisse, which has been struggling with various issues, recently accepted an offer to borrow over $50 billion from the European nation’s central bank, funds that it will use to undergo a reorganization.
The Swiss National Bank announced that it will provide this support because Credit Suisse “meets the higher capital and liquidity requirements applicable to systemically important banks.”
First Republic Bank, which had more than $200 billion worth of assets at the end of 2022, also generated headlines this week when a consortium of major financial institutions announced plans to deposit $30 billion into the troubled institution, which caters to wealthy individuals.
Market participants are also concerned about how high Federal Reserve officials will increase benchmark rates, a development that has broader implications for lending costs and therefore the economy.
While the aforementioned government officials have pledged to bring red-hot inflation under control, increasing borrowing costs could easily slow down growth, potentially pushing the U.S. economy into recession.
Further, higher benchmark rates could easily create headwinds for risk assets like digital currencies and stocks, which do not pay investors yields.
Investors around the world have been watching the Fed closely to see how high they push the target range for the benchmark federal funds rate.
Later this month, market observers will be watching for the latest rate decision from the Federal Open Market Committee.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS