Bitcoin prices rose above $21,400 after the Washington Post reported that U.S. federal authorities are considering safeguarding uninsured deposits at Silicon Valley Bank (SVB) should a buyer not be found for the institution, which collapsed last week following a $42 billion bank run. 85% of SVB depositors held money in accounts that were not FDIC-insured, meaning that without federal action or an outright purchase of the bank those funds could be irretrievable. The news of federal authorities considering safeguarding uninsured deposits at SVB has caused a surge in the price of bitcoin.
In an effort to prevent a financial crisis, the US Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation are discussing the possibility of protecting all uninsured deposits in the event that the auction for a certain bank fails to produce an acceptable buyer. Bids for the bank were due earlier today, and if the auction does not yield a suitable buyer, government action may be necessary. This would be a last resort to ensure that the financial system remains stable and that the uninsured deposits are safeguarded.
The collapse of Silicon Valley Bank (SVB) has caused concern for companies that banked with them, as they may have difficulty meeting payroll and checks or wires initiated before the bank’s collapse may fail. However, news of a possible rescue or purchase of SVB has caused the price of Bitcoin to jump to as high as $21,582.26, with recent trading at $21,400, up more than 4% in the last 24 hours. Companies banking with SVB are hoping for a rescue or purchase to help them meet their financial obligations, while Bitcoin investors are watching the situation closely to see if the cryptocurrency’s price will continue to rise.
