Bitcoin rose to $22,300 and Ethereum stood at $1,596, both nearly 8 per cent higher during the last 24 hours
The market cap of all cryptocurrencies is back above the $1 trillion mark.
After a joint statement from the Federal Reserve, U.S. Treasury, and Federal Deposit Insurance Corporation (FDIC) stated that all depositors of now-shuttered Silicon Valley Bank (SVB) and Signature Bank will be able to get their funds out on Monday, the battered crypto market turned green.
Late on Sunday night, Bitcoin (BTC) rose to $22,300 and Ethereum (ETH) stood at $1,596, both nearly 8 per cent higher during the last 24 hours, as per CoinMarketCap price data.
Top-30 coins Cardano (ADA), Polygon (MATIC), Solana (SOL), Litecoin (LTC), Avalanche (AVAX), and Filecoin (FIL) were all up by over 10 per cent as well.
On the contrary, the news appeared to cause uncertainty in conventional financial markets, with the U.S. dollar diving during early Monday trading.
US Dollar Coin (USDC), the market’s No. 2 stablecoin, reclaimed its dollar peg, coming back to a price of 99.3 cents on various price indices. US Dollar Coin had tumbled to a fresh all-time-low of 87 cents on Friday night after US Dollar Coin issuer Circle revealed that it still had $3.3b of the cash reserves supporting US Dollar Coin sitting in SVB.
The weekend plunge shook trust in US Dollar Coin and other stablecoins such as USDD, USDP, and prompted doubts about the overall credibility of stablecoins. It is not yet certain those doubts are quelled just because US Dollar Coin has bounced back.
The ongoing banking crisis and contagion arguably started just over a week ago when crypto-friendly Silvergate Bank showed indications of problems. After a number of crypto firms that used Silvergate (including Coinbase, Galaxy, Gemini, and Crypto.com) said they would stop using it, Silvergate shut down its Silvergate Exchange Network. By Wednesday, Silvergate said it would wind down its operations.
Just two days later, on Friday, the Nasdaq ceased trading of SVB, which experienced a $42b bank run the day earlier and was reportedly looking for an emergency acquisition. Within hours, regulators had shut down SVB, prompting bank and tech stocks to take a dramatic hit amid concerns other regional banks would be in trouble. Several crypto and tech startups publicly declared whether they had money in SVB. Then on Sunday, New York State financial regulators abruptly shut down Signature Bank, citing system risk.
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