Bitcoin gains 10% on US intervention in SVB
13 Mar 2023
Bitcoin rallied on Monday, along with other cryptocurrencies, as authorities in the US unveiled plans to curb the fallout from the Silicon Valley Bank (SVB) collapse and also as crypto company Circle told investors its peg was secure.
The Federal Reserve and US Treasury revealed a series of measures to stabilise the banking system, stating SVB depositors could access their deposits on Monday.
USD Coin (USDC) recovered after losing its 1:1 Dollar peg and plummeting to a record low on Saturday on fears over Circle's (the company behind USDC) exposure to SVB. At the time of writing, the stablecoin was trading at $0.9917, following lows last week of around $0.88.
CEO of Circle, Jeremy Allaire said the $3.3 billion USDC reserve deposit at SVB will be available when US banks open on Monday, Reuters reports.
"Circle's USDC operations will open for business, including with new automated settlement via our new partnership with Cross River Bank," Allaire stated.
Furthermore, Friday's collapse of SVB was followed on Sunday by the closure of Signature Bank by USD regulators, a key lender within the crypto industry.
"No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer," according to the US Treasury, Federal Reserve and Federal Deposit Insurance Corporation.
Depositors at Signature Bank will be "made whole," they went on to add.
"Given the Fed announcement over the weekend of a backstop for banks and specifically Silicon Valley Bank, markets have turned euphoric knowing that depositors' money is safe and a major potential bank run has been averted," said Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.
Bitcoin – the world's largest cryptocurrency by market cap – was trading up nearly 10% at $22,560.20, a 10-day high, as per CoinDesk data. In addition, the second largest crypto, Ether, was also up around 10% at $1,614.89.
The overall cryptocurrency market increased more than $70 billion over the last 24 hours to once again surpass the $1 trillion mark on Monday, CNBC reports.
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