The Bitcoin (CRYPTO: BTC) price is up 3% in the past 24 hours and a whopping 28% since this time last week.
At the time of writing, Bitcoin is trading for US$28,036 (AU$40,465).
That puts the world's top crypto up some 69% so far in 2023.
And it's not just the Bitcoin price that's shooting the lights out this past week.
Ethereum (CRYPTO: ETH), the world's number two crypto by market valuation, is up 12% since last Monday.
One Ether is currently trading for US$1,783.
Image source: Getty Images
What's driving the Bitcoin price higher?
The Bitcoin price looks to be getting some solid tailwinds on two fronts.
First, there's the past week's succession of banking failures that commenced in the United States with Silicon Valley Bank's collapse and spread to Europe to Credit Suisse and others.
As you may be aware, Bitcoin was born in the wake of the global financial crisis. Satoshi Nakamoto (the name used by the crypto's founder or founders) wrote the white paper that launched the token when trust in the global financial system was at a low point.
Now that trust is again being tested.
"An environment where higher interest rates after a period of hyper-low interest rates are creating bank runs is about as perfect a Bitcoin use-case as one can think," CEO of FRNT Financial Stephane Ouellette said (courtesy of Bloomberg).
The Bitcoin price also looks to be benefiting from investor expectations that the global banking woes will force the US Federal Reserve and other central banks to ease off their aggressive rate-tightening paths.
"Given the uncertainty, we are not yet seeing mass retail or institutional inflows into the market," crypto analyst Noelle Acheson said.
"What is moving the market is the shifting liquidity environment," she added, noting "expectations are consolidating around a much lower rate-hike ceiling than expected even a week ago. That environment is good for risk assets, and especially Bitcoin which has no earnings or credit vulnerability."
Proceed with care
While some crypto investors have made tidy profits, many have been stung by leaping in when FOMO strikes.
While the Bitcoin price could continue to march higher from here, it could also head in the other direction.
Remember, even after this year's remarkable rally, Bitcoin is still down more than 59% from its all-time high of US$68,790 reached on 10 November 2021.
Invest with care.
