Bitcoin took the $29,000 level tonight. The main reason for this was a 25 basis point hike in the benchmark interest rate last night. The market had been expecting just such an increase in the rate, so it reacted with relief.

Equally important was the information that this increase may be the last in the current cycle, which will positively affect the future prospects of the economy. This assumption was made by yesterday’s speech of representatives of the Fed. In it they did not use the previous rhetoric about possible base interest rate increases in the future. In this regard, the market now agrees that the rate will remain at the same level after the next FOMC meeting on June 14.

Accordingly, market participants are now waiting for the economy to improve, which adds points to their cautious positivity.

What is causing Bitcoin to rise?

The first growth factor from Sailor was investor concerns about inflation around the world. Here’s the relevant rejoinder that CryptoPotato cites.

Concerns about inflation definitely exist. As it increases, people are losing confidence in traditional currencies. This means they are beginning to realise that anything that is valued at cash flows is a currency derivative, and Bitcoin is not valued at cash flows.


Note that the inflation situation is really worrisome right now, which is why Fed officials keep raising the benchmark interest rate. This slows down the economy, which eventually causes the price curve to return to normal as demand decreases.

On 12 April 2023, the latest data was published for the US consumer price index, also known as the CPI. On a year-on-year basis it rose by 5%, while experts had last expected an increase of 5.1%. Also on a month-to-month basis, the index rose 0.1 percent instead of the forecasted 0.2 percent. Although the lower real figure is a positive development, 5% annual inflation is high anyway. And rising prices are affecting the stability of the economy, people's purchasing power and their confidence in the traditional financial system in general.


The belief of market players in the stability of the US economy has also been undermined by the prolonged banking crisis. Yet just a few days ago another major bank, First Republic Bank, collapsed. Here’s what Sailor thinks about it.

The banking crisis is causing people in the Western world to start losing a little faith in the system, and they are remembering that Bitcoin is a bank in cyberspace, run by incorruptible software. Thus the combination of concerns about inflation and counterparty risk in banks is driving the adoption of Bitcoin.

We think this position by Saylor is overly fabulous. Still, as banking crises intensify, most people will panic rather than think about alternative instruments to invest in. In addition, if a person has not owned cryptocurrencies before, they are more likely to not think of digital assets, as it takes faith in a decentralised economy to interact with them. However, crypto enthusiasts will be motivated to buy more coins in such an environment anyway - at least Stablecoins.

To recap, MicroStrategy currently holds exactly 140 thousand BTC on its balance sheet and is the largest Bitcoin investor among public companies. It has already made two rounds of cryptocurrency purchases this year. The average coin purchase price for the company is $29,803.

And while MicroStrategy continues to be in the negative, long-distance Bitcoin miners are already in a big plus. According to Glassnode, their revenue from the business reached the $50.2 billion mark the day before. Bitcoin mining, meanwhile, only cost $36.6 billion over the same period. Globally, the profitability of miners is around 40 percent.

And while the amount of miners' rewards, given the availability of rates and transaction data, can be calculated, the cost of mining BTCs will be quite approximate. Still, each miner has its own cost of electricity, and some also do so illegally at the expense of so-called free outlets. However, for illustration purposes the data is excellent.

The fundamentals of the network are also breaking records: the mining complexity is now at an all-time high, while the hash rate is near a record high.

Another interesting indicator is the recent increase in the number of transactions. On the first of May 2023, this figure set a high of 682 thousand transfers. The previous high of April 30 was 568 thousand units, i.e. the growth was more than impressive.

Basically, the growth is due to popularization of the Ordinals project on Bitcoin, which allows you to create an analogue of NFT in the network of the first cryptocurrency. Today, the total number of NFTs based on the Ordinals protocol exceeds the mark of 3.5 million units, according to Cointelegraph.


Inflation and the banking crisis are really powerful factors that make you question the reliability of the traditional financial system. Cryptocurrencies, which are decentralized and independent of bankers, can be a salvation from the collapse of the latter. Therefore, such events should be used to promote digital assets, whose fundamentals are often better than fiat money. That's what Michael is doing.