Bitcoin (BTC) has been steadily hovering above $29.5k as investors take into account sluggish U.S. economic growth data and the latest banking sector woes. The cryptocurrency had a roller-coaster ride the day before but has maintained its value, proving its ability to hold its worth even during unsettling events. The Commerce Department reported a 1.1% gain in GDP for the first quarter, which was below expectations of a 2% annualized growth rate. Additionally, disappointing personal consumption data was released, which caused BTC to dip slightly during U.S. morning trading. However, it quickly rebounded and was trading at around $29,600, up about 4% over the past 24 hours.
Ether (ETH), the second-largest cryptocurrency by market value, followed a similar pattern, jumping almost 3% over the past 24 hours to change hands at around $1,920. The CoinDesk Market Index (CMI), which measures overall crypto market performance, was up over 6% for the day. According to Bob Baxley, the Chief Technology Officer at the decentralized finance (DeFi) platform Maverick Protocol, bitcoin’s performance in recent days reflects investors’ confidence in the cryptocurrency’s ability to hold value even during unsettling events. He stated, “Bitcoin and other crypto assets have clearly been performing as the sort of safe haven that many had hoped this technology class would become.” Baxley added that BTC, ETH, and other major digital assets rose on Wednesday just hours after embattled regional bank First Republic’s shares plummeted by nearly 50%.
Baxley believes that investors are realizing the core value proposition of Bitcoin and ether, among others. They are decentralized, censorship-resistant forms of value that lack counterparty risk. “It’s hard not to see this value at a time when banks are looking as unsteady as they are now,” he said. Baxley thinks that the current boom in the cryptocurrency market is likely due to “intensifying expectations of more bailouts of wobbling financial institutions – or what those in the crypto asset community refer to as the ‘money go brrr’ scenario.”
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