Bitcoin was up 3.3% in afternoon trading on Sunday.
Dreamstime
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Bitcoin
is gaining after
UBS
announced a $3.2 billion deal to buy
Credit Suisse
,
a bid by Swiss regulators to calm a crisis of confidence in financial markets.
As of Sunday 4 p.m. Eastern time, Bitcoin was up 3.3%, to $28,334 a coin.
Ethereum,
another cryptocurrency, was up 1.7%, to $1,826 a unit.
Uncertainty has been fueling a rise in crypto prices this year, as Big Tech companies lay off workers and hunker down for tougher economic conditions ahead, and investors are spooked by instability in the financial system.
Three banks failed in March, including crypto lender
Silvergate Capital
,
which said it would close down operations. In the past week, regulators swooped in to take over the tech-industry-focused Silicon Valley bank, the second-largest U.S. bank collapse ever, and New York-based Signature Bank.
The disruption in the banking system could lead to a pullback in risk taking by lenders—which could cool the economy and also convince the Federal Reserve to slow its pace of interest-rate increases at this week’s meeting. Rising Treasury yields have siphoned interest away from cryptocurrencies in the past year, but if the Fed slows down, investors could head back to crypto.
Futures traders see a 62% chance of a quarter-percentage-point rate rise when the Fed announces its decision on Wednesday, with a 38% chance of no increase, according to the CME FedWatch tool.
Crypto could be rising for another reason: Regulators are open to a bank taking over Signature Bank’s cryptocurrency unit, according to Oanda Senior Market Analyst Edward Moya.
“Signature Bank was a key crypto bank in the U.S. and the survival of that business is key for long-term growth prospects for a good part of the cryptoverse,” Moya said in a note.
Moya adds he sees Bitcoin trying to break out and move to the $30,000 level.
Write to Liz Moyer at liz.moyer@barrons.com