- Bitcoin hit a nine-month high before reversing on Monday amid fears of an ongoing banking crisis.
- Credit Suisse was acquired by UBS in a deal that was essentially forced by the Swiss government.
- Amid a slew of bank failures, bitcoin's attributes are front and center as bulls talk up the benefits of a decentralized currency.
Bitcoin surged as much as 4% on Monday amid fears of an ongoing banking crisis that started with the downfall of Silicon Valley Bank earlier this month and has now led to the takeover of Credit Suisse by UBS.
The price hit its highest level in nine months in early trading, nearing the $30,000 mark which is set to represent a key resistance level as traders assess whether the banking crisis will spread or if it's fully contained. Bitcoin later gave up gains and turned negative.
Still, the decentralized cryptocurrency appears to have finally found its time to shine as many of its long-talked-about attributes are front and center amid a run on banks and interventions by governments and central banks to instill confidence in global finance.
The abrupt FDIC takeover of Silicon Valley Bank highlighted this dynamic, and it was on full display again over the weekend after the Swiss government essentially forced UBS to acquire Credit Suisse for just over $3 billion, with the government changing the law so shareholders were not required to vote on and approve the deal.
The deal also wiped out $17 billion of additional tier 1 bond holders in an unprecedented move, given that equity holders were not fully wiped out in the deal.
Since the FDIC took over Silicon Valley Bank on March 10, bitcoin has surged 42%, and it's up 63% from its mid-November low of about $15,500.
"The strengthening correlation between bitcoin and gold, coupled with the ongoing banking crisis, suggests that some investors may be turning to bitcoin as an alternative investment," Fundstrat's head of digital assets Sean Farrell said on Friday.
Fundstrat's Tom Lee said bitcoin's strong outperformance so far in 2023 is a testament to its "outright resiliency," especially when you consider the recent failures of FTX, Signature Bank, and Silvergate Capital.
"Despite this bitcoin is seeing accelerated gains. If this does not speak to the protocols resilience, I am not sure what does," Lee said on Monday. He recommended investors stay overweight the cryptocurrency.
But Fairlead Strategies' Katie Stockton is waiting for more signs of support above the $25,000 level before turning more bullish on bitcoin.
"A breakout would require consecutive weekly 'closes' above resistance and would complete a basing phase in a bullish long-term development. Next resistance is a nearby zone of $27,300 to $28,200... We would await confirmation before assuming a more bullish bias," Stockton told Insider on Friday.