The world of cryptocurrencies is unaware of the discouragement that has settled all over the world’s stock markets due to the bankruptcy of two American banks, Silicon Valley Bank (SVB) and Signature Bank. Investors specializing in risk assets reacted enthusiastically to the intervention of US regulators and the possibility that the Federal Reserve (Fed) will not raise interest rates at its next meeting in March. Cryptocurrency followers are optimistically reliving bitcoin’s creation momentRight after the 2008 crisis, as a decentralized alternative to the central bank-influenced fiat currencies. “In the face of the crisis,” they say from XTB, “the bitcoin blockchain may see some inputs as a decentralized entity not directly related to the banking industry.”
His growth was stellar. Market value of digital currencies in just 24 hours Recovered $70,000 million and momentarily exceeded a trillion dollars. Thus, the currency that grew the most and reached $24,000 (+17.16%) was bitcoin, followed by ethereum (+13.21%), cardano (+12.62%) and binance (+11.66%). Only tether remained in the red with a slight decline of 0.72%.
The growth of cryptocurrencies was mainly driven by the level of oversold in the market and the supply triggered by recent comments from US Treasury Secretary Janet Yellen. He does not expect a repeat of the 2008 crisis. “Markets perceived the decision of the US institutions as a possible prelude to quantitative easing in the US,” said XTB in a statement.
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But there are other reasons as well. Circle, the ‘stablecoin’ company of the same name, recovered almost 1:1 par with the dollar after learning that all deposits of SVB, which it holds for $3.3 billion, will be returned by the Federal Deposit Insurance Corporation (FDIC). At the same time, Binance announced $1,000 million buyback of bitcoin, ethereum and binancoin raise capital of the Industry Recovery Initiative to help companies with liquidity problems in the industry.
However, uncertainty also reaches this universe. “It is not yet clear how sustainable the current reversal is because We may see more banks fail in the United States“, they say from XTB. This is because it is still unknown whether the Fed’s decision to help banks “will reduce confidence and large sales” that will be seen in the coming days.