Bitcoin back above US$28,000 as U.S. Treasury eases bank worries

Bitcoin bounced back above US$28,000 on Friday morning in Asia amid a rebound in all top 10 non-stablecoin cryptocurrencies and gains in equities overnight. The market shrugged off the latest warnings from U.S. regulators to crypto platforms. Litecoin led the gains. U.S equities rose on Thursday after Treasury Secretary Janet Yellen said she would take “additional actions” to protect customer deposits if necessary, following a raft of bank failures this month.

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Fast facts

• Bitcoin rose 3.19% to US$28,225 in the 24 hours to 09:00 a.m. in Hong Kong, gaining 13.02% for the week, according to CoinMarketCap data. The world’s largest cryptocurrency has surged 70% so far this year.
• However, U.S. dollar to Bitcoin liquidity is worsening due to the shutdown of crypto-friendly banks such as Silvergate Bank and Signature Bank this month that reduced access to U.S. dollar payment services. Bitcoin liquidity fell to a 10-month-low in March, according to a tweet by crypto data platform Kaiko on Friday.
• Ether climbed 4.12% to US$1,811, a weekly gain of 8.54%.
• Litecoin was the biggest winner for the past 24 hours, gaining 7.07% to US$92.86 and up 18.09% for the week. The next halving event of the token is scheduled in August this year and previous halvings have tended to be preceded by price gains.
• The U.S. SEC issued an investor alert on Thursday to advise caution about the risks in “crypto asset securities,” stating that some providers of crypto investment services are not complying with federal securities laws, adding to the escalating conflict between U.S. regulators and crypto firms.
• The total crypto market capitalization rose 3.36% in the past 24 hours to US$1.19 trillion. Total trading volume over the last 24 hours dropped 19.78%% to US$55.26 billion.
• In the non-fungible token (NFT) market, the Forkast 500 NFT index edged up 0.21% to 4,120.05 points as of 09:30 a.m. in Hong Kong. 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 Thursday. The Dow Jones Industrial Average edged up 0.23%, the S&P 500 gained 0.30%, and the Nasdaq Composite Index gained 1.01%. 
• The rebound in equities followed Janet Yellen’s Thursday testimony to the U.S. Congress, reaffirming that the Treasury would take additional actions to secure bank deposits if necessary. This a day after she backed away from offering a blanket backstop for troubled banks.
• On the inflation front, after the Federal Reserve’s 25-basis-point rate hike on Wednesday, Fed Chair Jerome Powell said at a press conference that the Fed’s goal to bring annual inflation to the 2% range remains firm, and interest rates will be raised as needed to achieve this.
• The Fed’s next meeting on interest rate is May 3. Analysts at the CME Group expect a 65.8% chance the Fed will keep the rates at 4.75% to 5%. The chance of another 25 basis-point hike is at 34.2%, down from 49.4% on Wednesday.
• Ahead of the opening of U.S. equity markets on Thursday, stock futures inched higher as of 9:00 a.m. in Hong Kong. Dow Jones Industrial Average futures moved up 0.06%. S&P 500 futures gained 0.08%. The Nasdaq Composite Index edged up 0.01%.

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