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Bitcoin (BTC) gained ground during Tuesday's U.S. trading session as investors reflected on recent banking turmoil and showed renewed interest in cryptocurrencies and other store-of-value assets.

According to data from CoinCryptoUs, Bitcoin (BTC), the largest cryptocurrency by market capitalization, recently traded at approximately $28,775, representing a gain of roughly 2.6% over the past 24 hours. BTC had largely remained around the $28,000 mark for most of the previous day until early Tuesday, when it surged following a sharp decline in the shares of two regional banks - PacWest Bancorp (PACW) in Los Angeles, which fell by 27%, and Western Alliance Bank (WAL) in Phoenix, which dropped by 15%. Additionally, the latest Job Openings and Labor Turnover Survey (JOLTS) report showed weaker-than-expected results.

The recent collapse of four U.S. banks, including First Republic earlier this week, has caused turbulence in the economy but has appeared to bolster prices of cryptocurrencies. Additionally, the sluggish jobs data indicates a potential weakening of the economy and the possible easing of inflationary pressures, which could serve as another advantage for digital assets.

Ether (ETH), the second-largest cryptocurrency by market capitalization, rose by 2.5% to trade at approximately $1,877. In addition, the CoinDesk Market Index (CMI), which gauges the overall performance of the cryptocurrency market, increased by more than 2% for the day.

Equities declined during Tuesday's closing, with the S&P 500 trading down by 1.1%. Similarly, both the Dow Jones Industrial Average (DJIA) and the technology-heavy Nasdaq Composite fell by approximately 1%.

In the bond markets, the yield on the 2-year Treasury note, which serves as a measure of near-term interest rate expectations, decreased by 16 basis points to hover around 3.94%. Similarly, the yield on the 10-year Treasury note fell by roughly 14 basis points to 3.42%.

A survey of 37 investors conducted by CoinShares in April revealed that 64% of the participants believe the Federal Reserve has already made a policy error. Another 22% responded with "not yet," indicating that it is possible for the Fed to make a mistake in the near future. According to CoinShares, these findings suggest that there is a significant possibility for a policy error by the Fed.

The survey also revealed that despite regulatory actions taken in the first quarter of the year, the weighting of digital assets in investment portfolios has surged to approximately 1.6%, up from 0.7% in October. This substantial increase suggests that investors are showing an increased interest in digital assets despite regulatory uncertainty, indicating a growing acceptance of these assets as a legitimate investment option.

The latest survey shows that Ethereum continues to be the preferred digital asset, with little change from the previous survey conducted in January. “This is encouraging having endured uncertainty surrounding the Shapella upgrade," CoinShares said.

The survey revealed that funding managers hold a positive outlook on the growth potential of both Bitcoin (BTC) and Ethereum (ETH), which they consider to be the most compelling investment options in the cryptocurrency market. Meanwhile, the demand for altcoins is perceived to be relatively lower compared to BTC and ETH.

“Should the economy weaken further (risk-off) this would hurt ETH, causing ETH to underperform to the downside,” Greg Magadini, director of derivatives at crypto analytics firm Amberdata, noted in a recent newsletter. “A recession would cause the Fed to pivot and cut rates later this year (good for Gold and BTC).”

Magadini stated that he expects BTC to maintain its current momentum and increase its market share.