The U.S. Federal Reserve (FED) has announced that it has lent nearly $300 billion to bail out the U.S. banking sector. This has generated a significant increase in the price of Bitcoin (BTC), which has risen 30% since the beginning of the week.
The Fed has relaunched the printing press to come to the rescue of the US banking sector amid a crisis that has affected several financial institutions. Last week, Silicon Valley Bank (SVB) and Signature Bank filed for bankruptcy, which has generated panic among investors.
Nearly $300 billion has already been printed, $143 billion of which went to SVB and Signature Bank. The money was mainly used to pay their uninsured depositors.
The rise in the price of Bitcoin (BTC) comes as no surprise, as the fundamentals of the cryptocurrency only get stronger. The Fed's policy of raising benchmark interest rates for more than a year has pushed up long-term Treasury bill yields, which has reduced the value of bonds held by banks. As a result, banks were unable to obtain sufficient liquidity through the sale of their Treasury bills, generating a phenomenon called bankrun.
Faced with this situation, many investors have chosen to take refuge in Bitcoin (BTC), which has become a safe alternative to protect their money from inflation and central banks' monetary policies. The rise in the price of Bitcoin (BTC) could be an indication that investors are looking for new ways to protect their capital in the midst of a financial crisis.
