Bitcoin crossed over $30,000 as investors looked forward to higher interest rates

April 11 (Reuters) – Major bitcoin 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 aggressive monetary tightening campaign.

Bitcoin peaked at $30,438 in Asian trade and was last up 1.4% at $30,070. It has risen about 6% since the beginning of the month, after rising 23% in March.

Investors await Wednesday’s US inflation report to assess the Federal Reserve’s next steps after banking sector turmoil in March raised expectations that the central bank will forego raising interest rates to ease pressure on the sector.

Strengthening the case for a rate hike, however, the closely watched US Nonfarm Payrolls report on Friday showed that employers maintained a solid pace of hiring in March, indicating a still resilient economy.

“There was some speculation of a potential NFP failure on Friday, and that boosted confidence going into the CPI,” said Joseph Edwards, investment advisor at Enigma Securities.

Bitcoin and gold are outperforming the S&P 500 since the banking turmoil

Crypto investment products attracted $57 million in inflows last week — albeit in low volume — with most of the money focused on bitcoin, digital asset manager CoinShares said Monday. The report showed that this is returning digital asset flows into positive territory for the year.

“The market has done a great job of culling all leveraged participants in the last 18 months,” said Matthew Dipp, chief investment officer at Astronaut Capital, a Singapore-based crypto asset manager.

“If (bitcoin) can survive the week at more than $30,000, we go higher.”

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Ether, the second-largest cryptocurrency, stood near last week’s nearly eight-month peak of $1,942.50. It was last up 0.5% at $1,920.40.

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

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

Alkesh Shah, a strategist at Bank of America, said that while Shabella was unlikely to drive direct selling pressure on ether, there could be increased volatility around the event.

Additional reporting by Rai Wei in Singapore and Medha Singh in Bengaluru; Editing by Vidya Ranganathan, Jamie Freed, and Devika Syamnath

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