Bitcoin, is nearing $25,000 as the interbank funding stress indicator surges to the highest level since the COVID-19 crash. According to CoinDesk’s Bitcoin Price Index, the digital asset is trading at $24,500, up over 5% in the past 24 hours.
This surge in Bitcoin price comes as the interbank funding stress indicator, which measures the cost of borrowing dollars, has hit its highest level since the COVID-19 pandemic began. The indicator, known as the FRA/OIS spread, had risen to 60 basis points, the highest since March 2020, when it reached a record high of 143 basis points.
The rise in the FRA/OIS spread indicates that the cost of borrowing dollars in the interbank market is increasing, which suggests that banks are facing funding stress. This could be due to several factors, such as concerns over inflation, rising interest rates, or a shortage of liquidity in the market.
Bitcoin, which is often seen as a hedge against inflation and economic uncertainty, has been gaining popularity among investors as a store of value. The cryptocurrency has been on a bull run since the start of the year, with its price increasing by over 200% in just three months.
Many investors believe that the current economic environment, which is characterised by low-interest rates, a weak dollar, and rising inflation, is driving the demand for Bitcoin. They see cryptocurrency as a haven asset that can protect their wealth from the effects of inflation and currency depreciation.
Despite the recent surge in Bitcoin price, some analysts remain cautious about the cryptocurrency’s long-term prospects. They argue that Bitcoin’s high volatility and lack of regulation make it a risky investment and that its value could plummet at any time.
