Bitcoin and other cryptocurrencies rallied today as they countered the bearish trend in the stock market after Moody's announced a negative outlook for the US banking sector.
The rating agency downgrades 10 US banks, of which four, Bank of New York Mellon, US Bancorp, State Street and Northern Trust, are under review for possible downgrade.
On the other hand, Bitcoin is trading at $29,903, up 2.3%, according to CoinMarketCap data. The largest cryptocurrency by market cap has been moving in a tight range between $28,000 and $30,000 for the past two weeks.
Some analysts attribute the recent BTC surge to a renewed interest in Bitcoin as an alternative to the traditional banking system.
Greg Magadini, director of derivatives at Amberdata, said in a statement:
“Bitcoin is holding strong. The correlation between the stock exchange and bitcoin diverges as BTC proves to benefit from the banking turmoil.”
Magadini stated that the volatility of BTC fell to its lowest level in recent years in May as the banking crisis seemed to have eased and investors were shifting their attention to other sectors.
The rise in BTC price made its effect felt in other cryptocurrencies as well. While Ethereum and BNB experienced a similar rise to Bitcoin, XRP gained proportionally more value than them.
*Not investment advice.