Bitcoin prices go up when banks go down

• By the numbers: The price of the world's largest digital asset jumped 30% since the evening of March 10, to around $26,000 as of this afternoon.

The big picture: The mini banking crisis changed the market's expectations for what the Federal Reserve Board will do, Matt Hougan, chief investment officer at Bitwise Asset Management, said.

• "Events like this will strengthen the correlation between crypto and other risk assets," Hougan said.

State of play: Before Silicon Valley Bank's (SVB) collapse, the market was betting on a 50-basis point hike in interest rates by the end of the year. Now it is betting rates fall by that much.

Between the lines: "It's purely mathematical," Hougan said. "Nasdaq went up, crypto did too because the market was pricing in a rate reversal."

• Of note: A study published recently by New York economists questions the connection, saying bitcoin doesn't always react to macro events in a "systematic manner."

The other side: "None of this should matter to crypto," says Stefan Rust, CEO of inflation data aggregator Truflation. "If you think about what bitcoin was meant to be — Satoshi Nakamoto was talking about a peer-to-peer electronic cash system."

• "What drove early adoption was remittances and purchases, so much so that people spent 10,000 BTC to buy a pizza," he said.

Reality check: Those only now waking up to the value of bitcoin have to contend with long-term investors, who now hold roughly three-quarters of the total supply.

Is the world going to end? "Bitcoin plays into the narrative of the place to store your money in a crisis," Kurt Wuckert Jr., historian at CoinGeek, said.

• "Instability in stablecoins such as USDC and DAI have also pushed up bitcoin's price, as investors seek a safe-haven asset among cryptocurrencies," Ruadhan O, developer and founder of Seasonal Tokens, said, echoing Wuckert's theory.

Flashback: Bitcoin saw its biggest single-month gain in history in the wake of the Cypriot Financial Crisis in early 2013, during which the second-largest bank in the country issued a levy on bank deposits and took a portion of uninsured depositors' assets.

The intrigue: Tether (USDT) has been absorbing what others have been losing, Wuckert said, like Paxos-issued Binance namesake BUSD and more recently, Circle's USDC.

• It's a bizarre trend that would run counter to the idea of seeking safety. Per Wuckert: "It’s like taking money out of the bank in the nice part of the city and taking it to a known gangster bank."

Our thought bubble: Sounds like an unintended consequence of a wayward crackdown.