In light of the global banking crisis and its aftermath on the traditional banking industry, Bitcoin seems to be “a safe haven right now,” according to Reuters.

However, economists are divided between those who believe that digital currencies represent a revolution and that their use should be generalized, considering this safe haven as an alternative to banks and traditional banks, in the presence of individuals or governments. volatility and question their ability to continue to rise and outperform traditional banks.

The cryptocurrency, notorious for its volatility, has been pointed out by several economic reports and newspapers, according to Reuters, and is now returning to the forefront positively and significantly in light of the current banking meltdown.

According to Reuters, bitcoin rose 21% in March, while the volatile S&P 500 index lost 1.4% and gold gained 8%.

Cryptocurrency, for now, has severed its ties to stocks and bonds and has become competitive with gold in terms of value, fulfilling at least part of the dream of Bitcoin creator Satoshi Nakamoto. According to the agency, the bitcoin currency is a haven for distressed investors.

The sell-off by customers cost banks hundreds of billions of dollars and forced U.S. regulators to take emergency action. The past two weeks have seen the collapse of Silicon Valley Bank and cryptocurrency lender Silvergate, while Credit Suisse teetered on the brink.

Karim Saad El-Din, an economics professor at the American University in Cairo, explains to Al-Hurra the basic idea behind Bitcoin, which he says was launched in 2009 after the global financial crisis in 2008. Banks that destroy the world economy because of capitalism, must also compete with gold, but in the form of cryptocurrency.

In Saad El-Din’s view the fundamental Bitcoin revolution is that it cannot be controlled by governments or banks, so it is a free shop and a great way for ordinary people around the world to enter the world of investment. Speculation without being wealthy or businessmen or under the control of their governments or the World Financial System.

But this freedom did not last long, according to the economics professor, in recent years, large investment funds have decided to invest in Bitcoin and other cryptocurrencies.

Due to the global crisis in the markets caused by the “Covid-19” epidemic, these currencies have already taken a huge hit and reached a record level of $ 68,000 in November 2021, but after governments are trying to reduce global inflation rates by raising rates. Interestingly, in November 2022, the value of Bitcoin fell to $18,000.

The economics professor asserts his faith in the future of these cryptocurrencies in the face of central bank interventions and global market volatility, which he believes will last for years to come.

However, he pointed out that this view will be determined after it becomes clear whether the positive trend for bitcoin will continue after the Federal Reserve meeting, this week, where the US central bank will try to follow two paths: to fight inflation at the local level, and pressures on banks at the local and global level.

According to Reuters, bitcoin now accounts for nearly 43% of the total cryptocurrency market, its highest share since last June, with total cryptocurrency market capitalization up 23% to $1.1 billion since March 10, according to CoinMarketCap data.

On the other hand, Mohamed Hosni, a financial expert at an Egyptian bank, questions Bitcoin’s ability to continue rising, telling Al-Hura that after the end of the “Covid-19” period, Bitcoin fell and lost most of its momentum. Traders, and no longer relevant, value, whether they hold or trade, and are only indicative of the fluctuations of global markets.

Hosni attributes bitcoin’s recent rise to growing expectations that the US Federal Reserve may now not raise interest rates after a crisis in global markets.

“Bitcoin’s decline is inevitable, especially since what’s happening in global markets is considered temporary,” he believes.

The financial expert explained that everyone warned about the previous decline of Bitcoin as an unstable currency, and although some people want to buy this cryptocurrency, attention is still turning to the state of the traditional world markets, if it is stable, investors rush after it again.

Reuters pointed out that the rapid rise in the price of bitcoin forced some sellers to reduce their bets and buy back the regular coins. Data from Coinglass showed traders liquidated $300 million worth of crypto positions on Monday.

Therefore, the financial expert believes that it is too early to say now that Bitcoin can be a substitute in the global banking crisis.