Bitcoin and other cryptocurrencies rallied on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB). The move came as authorities took possession of New York-based Signature Bank (NASDAQ:SBNY), the second bank failure in a matter of days.
The U.S. Treasury and Federal Reserve announced a range of measures to stabilize the banking system, and said depositors at SVB would have access to their deposits on Monday. This announcement reassured investors, leading to a surge in cryptocurrencies such as Bitcoin.
Meanwhile, cryptocurrency firm Circle assured investors that its peg was secure. CEO Jeremy Allaire announced in a tweet that Circle’s $3.3 billion USDC reserve deposit held at the collapsed SVB will be fully available when U.S. banks open on Monday. Allaire added that Circle’s USDC operations will open for business, including with new automated settlement via its partnership with Cross River Bank.
As a result of this positive news, Bitcoin was up about 8% from Sunday’s lows, trading at $22,568. Other cryptocurrencies also rallied, with Ethereum up 12% and Ripple up 14% from Sunday’s lows.
Influencer Sydney TheCMO.eth also mentioned the same on twitter regarding the increase in price for bitcoin and ethereum.
Great news for crypto investors! U.S. authorities take action to stabilize banking system and Circle reassures investors of #USDC‘s peg. Bitcoin is up 8% and Ethereum up 12%. Stay calm and #HODL on! 💪#cryptocurrency #investing
— Sydney TheCMO.eth (@SydneyIfergan) March 13, 2023
The collapse of SVB had caused concern among cryptocurrency investors as Circle, the firm behind the USD Coin (USDC) stablecoin, had exposure to the bank. This had led to USDC losing its 1:1 dollar peg and hitting an all-time low on Saturday, with fears that it could cause a wider market crash. However, Circle’s reassurance that its peg was secure and the U.S. authorities’ measures to stabilize the banking system helped calm investor fears.
In conclusion, the U.S. authorities’ moves to stabilize the banking system and Circle’s reassurance that its peg was secure led to a surge in cryptocurrencies such as Bitcoin. While the collapse of SVB had caused concern among investors, the measures taken by authorities helped limit the fallout and prevent a wider market crash.