Bitcoin surpasses $30,000 as investors look forward to higher interest rates

SINGAPORE (Reuters) – Bitcoin has breached the key $30,000 level for the first time in 10 months on Tuesday, adding to its steady gains as investors raised bets that the US Federal Reserve will soon end its monetary tightening campaign.

Bitcoin peaked at $30,438 in Asian trade and was last up 2% at $30,262. It has risen about 6% since the beginning of the month, after rising 23% in March.

The token’s rally came on the heels of a closely watched US non-farm payroll report on Friday which showed that employers maintained a solid pace of hiring in March, pointing to a still resilient economy.

However, banking sector turmoil sparked by last month’s Silicon Valley bank collapse has fueled market expectations that the Fed is unlikely to raise interest rates much higher for much longer as it seeks to ease pressure on the sector.

“The reason for the widespread rally in cryptocurrencies is the optimism of traders towards the monetary policy of central banks,” said Tina Ting, market analyst at CMC Markets.

“The bets on the Fed pivoting sooner to raise interest rates have been significantly boosted in the wake of the banking turmoil in early March.”

Ether, the second-largest cryptocurrency, stood near last week’s nearly eight-month peak of $1,942.50. It was last up 0.75% at $1,925.80.

Cryptocurrency investors are eagerly anticipating a major revamp on the Ethereum blockchain this week that is set to allow them access to more than $33 billion worth of ether.

Dubbed Shapella, the software upgrade will allow players in the market to redeem their “accumulated ether” — the coins they have deposited and locked onto the network over the past three years in exchange for interest.

Reporting by Ray Wei. Editing by Vidya Ranganathan and Jamie Fried

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