- Bitcoin and other cryptocurrencies thrive amid economic uncertainty and bank failures in March.
- Despite regulatory enforcement activity and the collapse of crypto-friendly banks, BTC sees over 21% gain in March.
An eventful March, marked by bank failures and persistent macroeconomic challenges, has led investors to seek trustworthy investment options. This climate has proven advantageous for Bitcoin and other cryptocurrencies, which are considered stores of value resistant to economic turmoil. Recently, Bitcoin traded around $28,500, reflecting an over 21% increase in March. The largest cryptocurrency by market value even reached $29,100 at one point, its highest since June 2022, significantly outperforming the S&P 500, Nasdaq, and other traditional assets.
Greg Magadini, director of derivatives at crypto analytics firm Amberdata, highlighted the favorable macro landscape for “alternative money” in March. Both Bitcoin and gold, typically seen as safe-haven assets, experienced “explosive upside volatility” during the month. According to Magadini, the recent volatility in Bitcoin’s options market following the collapse of crypto-friendly Silvergate and Silicon Valley banks differed greatly from the more dramatic shifts after last year’s exchange FTX collapse and other crypto-related incidents.
Bitcoin’s surge indicates a growing concern around holding USD exclusively. This trend towards “alternative money” persisted despite the crypto industry facing regulatory enforcement activity and the collapse of crypto-friendly banks Silvergate and Silicon Valley Bank. The stablecoin sector was shaken by the banking crisis earlier in the month, but cryptocurrencies remained largely unscathed.
Ben McMillan, chief investment officer of crypto asset manager IDX Digital Assets, noted that institutional investors have been more concerned with “regulatory volatility and uncertainty” rather than the market volatility surrounding Bitcoin. This observation was made before the news of the U.S. Commodity Futures Trading Commission (CFTC) lawsuit against Binance, the world’s largest crypto exchange by trading volume, and its founder Chengpeng Zhao over alleged regulatory violations.
Ether (ETH), the second-largest cryptocurrency by market value, also experienced growth in March, trading at $1,820, a 13% increase. Earlier in the month, Ether reached $1,861, its highest level since August 2022.