Bitcoin (BTC), crypto prices rise as SVB depositors are protected
Jakub Porzycki | Nurphoto | Getty Images
Cryptocurrencies rallied Monday as the US government protected depositors at the collapsed Silicon Valley Bank HSBC bought the UK arm of the lender.
Bitcoin up nearly 10% as of 3 a.m. ET to $22,560.20, its highest in 10 days, according to CoinDesk data. ether was also around 10% higher at $1,614.89.
The overall cryptocurrency market gained more than $70 billion in the 24 hours to 02:00 ET and jumped back above $1 trillion on Monday.
It’s been a rollercoaster ride for crypto markets following the collapse of Silvergate Capital, a major lender to the crypto industry, last week. Silvergate announced on Wednesday that it was shutting down operations and liquidating its bank.
Then came the collapse Silicon Valley Bank on Friday in the biggest bank failure since the 2008 financial crisis.
Both Silvergate and SVB are investing in US Treasury bonds, which have fallen in value as the Federal Reserve has hiked interest rates. These banks were forced to sell these bonds at a loss to strengthen their capital position.
It was closed on Sunday signature banka major lender in the crypto industry, by US regulators to curb contagion to the broader banking sector.
These moves by regulators to create a backstop for SVB and protect depositors in these institutions have boosted investor confidence.
The US Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation said on Sunday that SVB depositors will have access to all of their money starting Monday.
“No losses related to the dissolution of Silicon Valley Bank will be borne by the taxpayer,” regulators said.
Depositors at Signature Bank are “made whole,” they added.
“With the Fed announcing a backstop for banks, and Silicon Valley Bank in particular, over the weekend, markets have become euphoric, knowing that depositors’ money is safe and a potential bank run has been averted,” said Vijay Ayyar, vice president for banking Corporate development and international on crypto exchange Luno, CNBC announced via email.
In addition, HSBC said it has agreed to acquire SVB’s UK arm for £1 ($1.21). Britain’s Treasury said on Monday that “no taxpayers’ money is involved and customer deposits have been protected”.
https://www.cnbc.com/2023/03/13/bitcoin-btc-crypto-prices-surge-as-svb-depositors-protected.html Bitcoin (BTC), crypto prices rise as SVB depositors are protected