The price increase of Bitcoin was followed by a significant overnight increase in the number of Bitcoin whale addresses.

Bitcoin (BTC) continued its gains, reaching about $45,000 on March 1 as interest rate speculators lowered their bets on strong rate rises in 2022 and the number of whale addresses increased amid speculation that BTC is proving to be an apolitical safe-haven.

In March half-point Bets are being Reduced by Traders

BTC’s price increased by more than 4% to nearly $45,000, a day after it experienced its biggest one-day increase since February 2021, as a flurry of sanctions against Russia, including a ban on access to the global banking system SWIFT, raised concerns about their impact on global growth and inflation.

Swaps related to the Federal Reserve’s mid-March meeting, for example, predicted a 24.5 basis point (bps) tightening on March 1, 2022. This suggested that a 0.5 basis point rate rise, which received unanimous agreement from interest rate traders last month, is less likely to occur.

The Fed’s view has been repriced as investors’ demand for safe-haven assets, such as US Treasuries and gold, has surged in recent days.

Bitcoin, which had already lost more than half of its value due to concerns about rapid Fed rate rises, also reacted with a dramatic rebound, owing in part to claims that Russians were purchasing the cryptocurrency to avoid sanctions.

Analysts opine, “Bitcoin experienced a huge upward rise today as it looks to have partially recovered its safe-haven reputation as the Russia-Ukraine crisis intensifies.”

Crypto research companies have to say that there is a large increase in the number of addresses owning at least 1,000 BTC, which the industry refers to as “whales.” Their number increased from 2,127 on February 27 to 2,266 on February 28.

25 BPS or no 25 BPS?

At the Federal Open Market Committee meeting at the end of February, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, reportedly, recommended a 25 Basis Point Rate rise. Nonetheless, he said that a higher-than-expected inflation number might prompt him to “look at a 50-basis-point shift in March.”

The Russia-Ukraine situation has pushed the Fed to tread on unstable terrain. With inflation expected to continue higher owing to increasing oil costs, he warned, a rate move in March that is overly aggressive risks collapsing the stock market.  Further, inflation is so high that we can probably afford a stock market drop of up to -20%.