Bitcoin and other cryptocurrencies rallied after US authorities said they planned to delay the fallout from the Silicon Valley Bank collapse and cryptocurrency firm Circle told investors it was safe to dock.
The US Treasury and the Federal Reserve issued expected steps to stabilize the banking system and said that SVB depositors would be able to access their deposits.
Stablecoin USD, which lost its 1:1 peg to the dollar and hit record lows on Saturday on fears of Circle, the firm that backs USDC Silicon Valley Bank, rose. It was at $0.9918, closer to a positive result than last week’s $0.87.
Bitcoin rallied around 8.4% on weak data on Sunday, trading at $22,567.
US officials said depositors at Signature Bank of New York, which the New York state financial regulator shut down on Sunday, will not cost taxpayers.
One firm, like SVB, had clients concentrated in the technology sector, and the increase in interest rates had a negative impact on its balance sheet values. As of September, about a quarter of Signature’s deposits were generated from the cryptocurrency industry. However, the bank announced in the winter month that it would reduce cryptocurrency-related deposits by $8 billion.
Most analysts cautioned against expecting market sentiment to improve after implementing these mechanisms.
Meanwhile, the Bitstamp cryptocurrency exchange said it would continue business as usual despite Signature Bank’s negative results.
Billion dollar hit to cryptocurrencies
When Binance, one of the world’s largest cryptocurrency exchanges, declared the conversion of its funds from the BUSD stablecoin from its Business Revitalization Program to cryptocurrencies such as BTC, BNB, and ETH, the company experienced a billion-dollar loss. dollars in the cryptocurrency bear market.
The Binance CEO announced that several funds would be invested in the chain to ensure transparency. Binance’s move indicates the exchange’s faith in the future of the crypto market. Many hope that this movement could be the reason for the sudden increase in the prices of BTC, ETH and BNB.
Binance’s decision comes amid an escalating fight for US-based cryptocurrency companies as banking challenges pose significant issues.
