Despite growing concerns in the US banking industry, the crypto industry is holding its own, raising more than $4 million through token sales last week.
On March 19, CryptoRank data revealed that despite a contraction, the amount raised had increased significantly; showing the resilience and adaptability of the crypto industry.
The collapse of major US banks affects the cryptocurrency industry
He data It showed that the crypto industry raised $4.11 million through token sales, despite declining token sales the previous month.
The total raised in the past two months came to an impressive $6.89 billion, up from $933.55 million last month, including private rounds.
This is against the backdrop of the collapse of major banks Silvergate, Silicon Valley Bank (SVB) and Signature Bank, which exposed the vulnerability of the traditional banking sector while temporarily depriving the US crypto market of its main fiat on-ramps.
Analysts have attributed the collapse of SVB and Silvergate to unfavorable market conditions and poor risk management. SVB’s decline was due to overexposure to long-term government bonds, which depreciated when interest rates rose. This left the bank without assets as many depositors withdrew their funds simultaneously.
The Silvergate collapse was fueled by the FTX collapse, hurting confidence in the cryptocurrency sector with short sellers expressing their concerns on Twitter.
Signature Bank’s closure sparked controversy as it was reportedly not insolvent and had already stabilized its capital outflow when US regulators intervened. Many cryptocurrency enthusiasts saw this as a politically motivated move to get cryptocurrency out of the US.
With the collapse of Silvergate and Signature Bank, the two main financial institutions that provide banking services to US crypto businesses, it was widely believed that crypto businesses would face major obstacles when interacting with the dollar-based financial system. However, recent fundraising success suggests otherwise.
Fundraising methods: ICO, IEO and IDO
Initial Coin Offerings (ICOs), Initial Exchange Offerings (IEOs), and Initial Decentralized Offerings (IDOs) are fundraising methods that differ in structure and execution, but share similar goals.
ICOs allow companies to raise funds by creating new coins, apps, or services. IEOs involve online trading platforms that place digital asset offerings on behalf of companies, providing immediate trading opportunities. IDOs, the latest fundraising model, offer higher liquidity and are issued by decentralized exchanges.
Bitcoin (BTC), the world’s largest cryptocurrency, experienced a tumultuous ride, reaching an all-time high of nearly $69,000 in November 2021 before falling below $20,000 in March 2023.
Despite the banking crisis, bitcoin is back on the rise, trading at around $27,740 at the time of writing. CryptoRank.io data indicates that Binance leads the Bitcoin and Ethereum markets in daily futures volumes.
