Things change fast in the cryptocurrency industry. In the span of seven days, the market shifted completely, with the sentiment escaping the fear zone. The total capitalization also soared, adding a whopping $165 billion in the process. But what happened? Well, let’s dive in.
First things first, it’s important to note that BTC’s price is currently trading above $26K, reaching highs last seen nine months ago in June 2022. This marks a 30% increase, and it comes on the back of major macroeconomic developments in the United States.
Recall that Silicon Valley Bank – a major financial institution in the US with a substantial amount of VC money in deposits, went bust. The bank revealed a hole in its balance sheet and was unable to patch it through a share offering, scaring depositors who attempted to get their money out. In a matter of days, authorities shut it down, leaving many people worried about whether they would get their deposits at all.
The US Government, in the face of the Federal Reserve, the Treasury, and the FDIC, was quick to assemble a rescue plan, promising that all depositors will be made whole. And while they refuse to call it a bailout, many claim that it’s exactly this. US banks borrowed a whopping $300 billion as the financial markets shuddered following the failure of SVB.
In turn, this caused many investors to believe that the Federal Reserve will not hike interest rates further in an attempt to lessen the strain on the banking system. In fact, the markets are now pricing a possibility of no hike at all, compared to a week ago, when they were pricing in a 50bps hike.
This has essentially hinted to market speculators that the Fed might even pivot in their monetary policy, propelling prices of risk-on assets such as BTC (and almost all other cryptocurrencies) to the stratosphere.
There are many variables, and we have yet to see how the whole situation will play out, but for now, crypto markets are reacting incredibly positively to the news. Could it be that BTC is finally fulfilling its purpose of serving as an inflation hedge? Or is this another speculation-drive rally?
In any case, the following weeks will be particularly important and exciting, especially as the Fed is set to meet on March 22.
Market Data
Market Cap: $1175B | 24H Vol: $107B | BTC Dominance: 43.7%
BTC: $26,568 (+30.4%) | ETH: $1,725 (+20.1%) | BNB: $331 (+19.7%)
This Week’s Crypto Headlines You Better Not Miss
3 Reasons Bitcoin Exploded to a 9-Month High This Week. Bitcoin’s price increased by a whopping 30% in the past seven days. Here are three possible reasons and considerations to take into account as to why this may have happened.
What You Need to Know About the Arbitrum Airdrop. The wait is finally over. The Arbitrum airdrop is confirmed, and ARB will be distributed to eligible addresses on March 23rd. Here’s how you can check whether you qualify and how many tokens you will get.
Who Has Exposure to SVB and Signature Bank? A Closer Look. Silicon Valley Bank holds money for a lot of clients, and crypto-focused companies are absolutely no exception. In this article, we take a closer look at who has their money exposed and to what extent.
HSBC Acquires Silicon Valley Bank UK for a Pound (Report). Europe’s largest banking institution – HSBC – bought the UK branch of Silicon Valley Bank for one pound. The deal is structured to protect investors, and HSBC will inject additional liquidity into the failing bank.
European Regulators Blast Federal Reserve for SVB Depositor Bailout. European regulators are not happy with the Fed’s decision to bail failing banks out. Some have said that this is an approach of “systemic risk exception.”
US Judge Denies DOJ’s Appeal to Stay Voyager-Binance.US $1B Deal. Despite the attempts of the US Government to halt the deal between Binance US and Voyager, the judge overseeing the case has once again denied the DOJ’s appeal. He said this would harm Voyager’s customers who are waiting to receive their funds.
Charts
This week we have a chart analysis of Ethereum, Ripple, Cardano, Binance Coin, and Polkadot – click here for the complete price analysis.
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