Bitcoin (BTC) is the largest cryptocurrency by market capitalization and it has been trading as high as $24,574 Monday midday, according to CoinDesk data. This is a 10% increase over the past 24 hours and a significant jump from its dip below $20,000 last Friday (UTC). The surge in BTC’s value is likely due to the collapse of SIVB, which has caused investors to flock to the cryptocurrency as a safe haven. With its current market capitalization, BTC is proving to be a reliable and profitable investment for those looking to diversify their portfolios.
The New York State Department of Financial Services (DFS) has taken possession of Signature Bank, a crypto-friendly bank, to protect depositors. Despite this, markets have been buoyed by the regulators’ decision to make depositors at Signature Bank and Silicon Valley Bank whole. This news has been welcomed by the crypto community, as it shows that regulators are taking steps to protect investors in the crypto space. The DFS has also taken steps to ensure that the banks are compliant with existing regulations. This move is seen as a positive step towards the mainstream adoption of cryptocurrencies.”
The Federal Reserve’s bailout of depositors has helped to reduce fears of contagion risk, leading to a short squeeze in the markets. This has been beneficial for investors, as it has allowed them to take advantage of the increased liquidity and higher prices. The bailout has also helped to reduce the risk of a financial crisis, as it has provided a safety net for depositors in the event of a bank failure. The bailout has also provided a boost to the economy, as it has increased confidence in the banking system and encouraged more people to invest. Overall, the Fed bailout has been a positive development for the markets and the economy.”
Monday saw a surge in Bitcoin prices, catching traders who had bet on a price fall off guard. This forced them to liquidate $81 million worth of BTC short positions over the course of the day. It is believed that most of these positions were placed on Friday when concerns were heightened. This type of short squeeze tends to push prices higher, and Monday’s surge was no exception. As the market continues to be volatile, traders should be aware of the risks associated with short positions and be prepared for sudden price movements.
Circle’s USDC stablecoin and Binance’s decision to exchange stablecoins from its recovery fund to bitcoin and ether have contributed to the recent surge in bitcoin prices. Binance announced that it would convert $1 billion worth of BUSD to bitcoin, ether, BNB coin and other tokens to support the market, likely leading to increased buying pressure. Joe DiPasquale, CEO of crypto asset manager BitBull Capital, believes that the outflow from Circle’s USDC stablecoin and Binance’s decision to exchange stablecoins from its recovery fund to bitcoin and ether have both contributed to the recent price increases.”
The markets may have been encouraged by the possibility of a more dovish tone from the Federal Reserve, which has been criticized for raising interest rates too aggressively. Goldman Sachs analysts forecast no rate hike at the Federal Open Market Committee’s March 22 meeting due to recent banking stresses. However, sentiment remains apprehensive and cautious due to possible further banking fallouts and businesses struggling to manage cash flow. Investors should remain vigilant and monitor the situation closely.”
The Federal Reserve has recently announced a series of policies to help financial institutions during the COVID-19 pandemic. While these policies have been welcomed by some, others have voiced their concerns, including that none of the policies address the fundamental duration mismatch problem that many of these financial institutions have. Joshua Frank, co-founder and CEO of The Tie, a provider of information services for digital assets, has struck a cautiously optimistic note, suggesting that the policies may help in a distress situation. However, it remains to be seen if these policies will be enough to help financial institutions in the long run.”
The crypto market has responded positively to the recent banking bailouts, with Bitcoin being seen as a safe haven and hedge. However, US regulators are still trying to de-bank crypto, and the macro environment is uncertain. To ensure continued recovery, widespread support for Bitcoin as a hedge and safe haven is needed, similar to the narrative that emerged in 2020/2021 with the Bitcoin halving/inflation hedge. Despite the loss of Silvergate, SVB and Signature, the crypto market is still optimistic and is looking to the future.”
Cryptocurrency markets saw a surge on Monday, with Ether (ETH) rising by over 7% and Layer 2 protocol Optimism’s native OP token surging 21%. LDO, the governance token of the decentralized autonomous organization (DAO) behind liquid staking system Lido, gained 15%. The CoinDesk Market Index, which measures the overall crypto market performance, was up over 10%. This surge in the crypto market is likely due to the increasing demand for digital assets as investors look for alternative investments. The rise in Ether and other tokens is a sign of the growing popularity of cryptocurrencies and blockchain technology.”
Equity markets were mixed on Monday, with the S&P 500 closing down 0.1%, the Dow Jones Industrial Average (DJIA) sliding 0.2%, and the Nasdaq Composite up 0.4%. Marathon Digital Holding (MARA) was a standout, closing up 25% after announcing it still has access to $142 million at Signature Bank. Investors will be watching Tuesday’s release of the February Consumer Price Index for further market direction. The CPI is a measure of inflation and can influence the Federal Reserve’s monetary policy decisions, which in turn can affect the stock market.
