#Bitcoin has been on a roll lately, breaking through $25,000 with high buying pressure in the market. Most major digital assets are in the green as #Asia starts its business day. Bitcoin is up 5.3% in the last 24 hours to $25,703, while ether is up about 2.8% to $1,697. Binance’s BNB token is up 8.7% to $331. This mini-crypto rally has caused a lot of excitement among crypto enthusiasts and investors alike, and it's not hard to see why.
According to Kaiko’s Director of Research, Clara Medalie, the recent surge in crypto prices is due to low liquidity in the market and high buying pressure. Binance converting $1 billion of #BUSD to bitcoin, ether, #BNB, and other tokens was the fuel for the fire. “This is a huge amount of buy pressure on the markets,” Medalie said. “As the markets aren’t that liquid, any significant buying pressure is likely going to have a considerable impact on prices as a whole.”
But what does this mean for the future of Bitcoin and other digital assets? Is this the start of a new bull run or just a temporary spike? Let's take a closer look.
Europe and Asia: A Magnet for Liquidity Orphaned by the Collapse of Silvergate and Signature
Medalie also notes that Europe and Asia have a chance to be a magnet for liquidity orphaned by the collapse of Silvergate and Signature. “There are quite a few crypto companies actually based in Europe or APAC that have maintained their banking relationships, so it actually presents a pretty big opportunity for these regions to accept crypto businesses,” she said.
For example, Maicoin in Taiwan has a relationship with a large bank in Taiwan, which acts as a fiat pipeline for Maicoin. Even though Silvergate and Signature just went out of business, this shows that crypto companies can still do business in areas where they still have banking relationships.
Breaking Correlation Between Stocks and Crypto
Medalie also notes that the correlation between stocks and crypto is breaking, pointing to the divergence between crypto and equity markets at the start of the year and during this most recent rally. “It flipped this week." "We see crypto markets rallying, while equity markets have completely collapsed,” she said. “The divergence in these markets has flipped, and that’s being maintained, which is creating this decreasing correlation for both Nasdaq’s tech stocks and Europe’s 600 index.”
This is an interesting change because it shows that the crypto market is becoming more independent from traditional financial markets. If this trend continues, it could mean that cryptocurrencies are starting to be seen as a legitimate alternative investment.
Conclusion
Overall, it's clear that the recent surge in Bitcoin and other digital assets is due to high buying pressure and low liquidity in the market. This has caused excitement among crypto enthusiasts and investors, who are wondering if this is the start of a new #BullRun or just a temporary spike. However, it's important to note that the crypto market is still very volatile, and there are many factors that could cause prices to fluctuate.
That being said, the breaking correlation between stocks and crypto is an interesting development that suggests that cryptocurrencies are starting to be seen as a legitimate alternative investment. And with opportunities for crypto companies to operate in regions where they have maintained banking relationships, despite the recent collapse of #Silvergate and Signature, it's clear that there is still a lot of potential for growth in the crypto industry.
Only time will tell what the future holds for Bitcoin and other digital assets. But one thing is for sure: the crypto market is a fast-paced and exciting space