Bitcoin (CRYPTO: BTC) surged to $26,000 on Tuesday, reaching its highest value since June 2022, amid a growing sense of optimism that the digital asset sector will weather the recent turmoil in the U.S. financial system.
The largest cryptocurrency has gained for the fourth consecutive day, with an increase of up to 7.9% to $26,142.
The last time it traded above $26,000 was in June.
Ether (CRYPTO: ETH) meanwhile, is nearing the $1800 mark and is currently trading around $1772.
The rally has seen a significant increase of about 29% since Silicon Valley Bank failed on March 10.
According to data from derivatives trading site Coinglass, over $280 million in short crypto positions were liquidated in the past 24 hours.
Marius Grigoras, chief executive officer of BHero, told Benzinga that as institutional investors continue to enter the cryptocurrency space, he expects traditional financial markets to pay more attention to the impact of cryptocurrencies.
“The crypto-market has longed for more approval from mainstream investors, so current events will certainly become a boost for the crypto space,” he added.
Cuautemoc Weber, co-founder and CEO of Gateway.fm said due to the exotic nature of crypto, many hedge funds saw this asset as a good diversifier in normal market conditions, however, the situation is evolving as the cryptocurrency market becomes more integrated into traditional financial markets, leading to increased correlation.
“In the long run, the crypto markets will become less volatile and risky in line with broader adoption and acceptance of blockchain technologies. It will likely open a door for risk-aware investors, and more capital will flow into the industry,” he added.
After a jittery week that witnessed the collapse of three crypto-friendly banks in the U.S., local regulators have taken steps to shore up the nation's banking sector.
This move has helped to stabilize the virtual digital tokens market. Moreover, regulators have pledged to fully protect depositors, which has helped to bring back the world's second-largest stablecoin, USD Coin (CRYPTO: USDC), to its intended $1 peg.
The stablecoin's value had cracked over the weekend following the shutdown of Silicon Valley Bank (NASDAQ:SIVB).
Michel Caspers, co-founder and CMO of the Unity Network said that Bitcoin can show it will be a perfect hedge against inflation, a crashing financial system, and governmental uncertainty.
“If Bitcoin won’t show its strength and rise where others falter, its true purpose has to be rethought and perhaps there is no real use for Bitcoin at all,” Caspers said.
Read next: Silicon Valley Bank Depositors Will Have Access To All Their Money, Say Regulators
Photo: Shutterstock
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!