Bitcoin gains as investors diversify amid worries about banking system; U.S. equity futures rise

Bitcoin and the other top 10 non-stablecoin cryptocurrencies opened the working week with gains in Monday morning trading in Asia, as investors seek to diversify portfolios amid banking turmoil and the Federal Reserve’s latest rate hike. Litecoin led the winners. U.S. equity futures rose this morning as authorities sought to reassure investors the financial system is sound following bank failures and sharp declines in some lender’s stocks.

Fast facts

• Bitcoin rose 1.69% to US$28,026 in the 24 hours to 09:00 a.m. in Hong Kong, adding 0.37% for the week, according to CoinMarketCap data. The world’s largest cryptocurrency dipped below the US$28,000 resistance level over the weekend, and bounced back above it early on Monday. Trading turned choppy later in the morning and it moved above and below that line.
• “Traders are flocking to Bitcoin and similar assets to diversify their holdings. Recent bank failures have also strengthened the case for investing in Bitcoin, along with murmurs of hyperinflation,” Maxwell Goldstein, cofounder of on-chain fine art investment platform Freeport, told Forkast.News on Friday. Due to fears of inflation, “investors are absolutely seeking a safe haven asset and Bitcoin fits the bill.”
• Ether moved up 1.61% to US$1,780, a weekly gain of 0.16%. Ethereum developer Matter Labs launched the mainet of zkSync Era on Friday, making it the first zero-knowledge scaling system for Ethereum that was opened to general users.
• Litecoin led the winners for the past 24 hours, gaining 1,85% to US$93.57 and up 12.39% for the week.
• The total crypto market capitalization rose 1.34% in the past 24 hours to US$1.17 trillion. Total trading volume over the last 24 hours dipped 4.67% to US$31.46 billion.
• In the non-fungible token (NFT) market, the Forkast 500 NFT index dropped 1.52% in the past 24 hours to 4,024.34 as of 09:30 a.m. in Hong Kong, moving down 2.66% for the week. The index is a proxy measure of the performance of the global NFT market and includes 500 eligible smart contracts on any given day. It is managed by Forkast sister company, CryptoSlam.
• U.S. equities closed higher on Friday. The Dow Jones Industrial Average rose 0.41%, the S&P 500 gained 0.56%, and the Nasdaq Composite Index moved up 0.31%. All three indices logged gains after a volatile week characterized by wobbly banks and the Federal Reserve’s latest 25-basis-point rate hike.
• Despite the gains, bank worries remain. Deutsche Bank, the largest lender in Germany, saw the cost of its default insurance jump on Friday, triggering an 8% sell-off in its stock, according to CNBC.
• On the same day in the U.S., the Financial Stability Oversight Council said that although “some institutions have come under stress, the U.S. banking system remains sound and resilient.” Other officials from U.S. President Joe Biden on down have repeated the same in recent weeks.
• Ahead of the opening of U.S. equity markets on Monday, stock futures rose as of 9:00 a.m. in Hong Kong. Dow Jones Industrial Average futures moved up 0.36%. S&P 500 futures gained 0.37%. The Nasdaq Composite Index futures edged up 0.24%.
• In the week ahead, the U.S. Congress on Wednesday will hold a hearing on Silicon Valley Bank and Signature Bank, which both failed this month, and data releases are expected on U.S. inflation and GDP growth.
• The Federal Reserve will meet on May 3 to make its next move on interest rates to tackle inflation. Analysts at the CME Group expect a 83.2% chance the Fed will keep rates at 4.75% to 5%. The chance of another 25 basis-point hike is at 16.8%, down from 34.2% on Friday.
• The Fed’s current projection of the terminal interest rate in 2023 is 5.1%, same as the projection in December 2022, indicating that one more rate hike in 2023 could bring the Fed’s tightening cycle to an end.

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