Investing.com - As the US banking sector faces another round of turbulence, Bitcoin is capitalizing on its "safe haven" status and enjoying a boost in value. In just one month, yet another bank has come closer to being taken over by the Federal Deposit Insurance Corporation (FDIC), contributing to an overall positive impact on Bitcoin's price.
Despite bearish sentiment dominating stock markets, cryptocurrency continues to shine as investors seek alternative options. Recently, PacWest Bancorp revealed it was considering various alternatives, including a potential sale – a decision that led to a staggering 55% plunge in the bank's stock value before eventually recovering by day's end.
The downfall of PacWest Bancorp rippled through other regional banks too, with some experiencing declines exceeding 25%. However, despite these setbacks within the banking industry, the Federal Reserve maintains that the system remains "sound and resilient." This statement comes after implementing a 25 basis points increase in the Federal Funds Rate on May 3rd.
Many market participants expressed skepticism about this optimistic view from the Fed given recent events. Financial experts under Wall Street Silver anticipate further turmoil for banks like PacWest Bancorp (NASDAQ:PACW) and expect closures followed by potential sell-offs. The Kobeissi Letter also speculated why such struggling banks might not be immediately acquired but instead follow similar paths as First Republic Bank did previously.
With mounting pressure within the banking sector expected to continue influencing interest rates hikes at future meetings – currently estimated at an 85% likelihood – borrowing costs may ease slightly following consecutive rate increases over time.
In contrast with this uncertainty surrounding traditional financial institutions, Bitcoin inches closer toward $30K per coin while trading around $29K currently. Alongside growing investment values are surging social dominance indicators reflecting increased investor interest in cryptocurrencies as viable alternatives amid ongoing banking woes.
Remarkably, Bitcoin's network has welcomed nearly one million new users within the last ten days – a significant milestone considering it typically takes around two months to achieve such growth. The total number of users for March and April combined was surpassed in just a few recent days, with the overall figure now standing at 45.3 million.