Bitcoin climbs 10% as crypto market tops $1 trillion

The overall crypto currency market rose over $70 billion, climbing back above $1 trillion

Crypto currencies rallied on Monday as the U.S. government stepped in to safeguard depositors of the collapsed Silicon Valley Bank (SVB) and HSBC acquired Silicon Valley Bank U.K.

Bitcoin was up 5 per cent at $22,374.68, as per Coin Metrics data. Ether gained 2 per cent to $1,585.58.

The overall crypto currency market rose over $70 billion in the 24 hours to 6:00 am GMT, climbing back above $1 trillion on Monday.

It has been an upheaval for crypto markets after the collapse of Silvergate Capital last week, a major lender to the crytpo industry. Silvergate said Wednesday it is shutting down operations and liquidating its bank.

Then came the collapse of SVB on Friday in what was the biggest banking failure since the 2008 financial crisis.

Both Silvergate and SVB put their money into U.S. Treasuries which have lost value as the U.S. Federal Reserve has increased interested rates. These banks have been compelled to sell these bonds at a loss to maintain their capital position.

That was followed on Sunday by the shutdown of Signature Bank, an important lender in the crypto industry, by U.S. regulators to stem any contagion to the wider banking sector.

These moves by regulators to create a backstop for SVB and safeguard depositors in these institutions have improved investor confidence.

The U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation said Sunday that depositors of SVB will have access to all of their money starting Monday.

No losses related to the resolution of Silicon Valley Bank will be borne by the taxpayer, the regulators said.

Depositors at Signature Bank will be ‘made whole,’ they further said.