Bitcoin Rises Nearly 20% After Silicon Valley Bank ‘Bailout’

The price of Bitcoin is up 19.8% in the past 24 hours after regulators and the Joe Biden administration stepped in to reassure investors that depositors at the failed Silicon Valley Bank would be made whole — and that the US banking system remains on a stable footing reason.

At the time of writing, Bitcoin was trading at $24,428, up nearly 20% over the past day and 6% jump in the past hour, according to CoinGecko. Ethereum, the second-largest digital asset, rose 15% in 24 hours; it is up 3.4% in the past hour, priced at $1,680.

The rest of the crypto market is also in the green, with Dogecoin, the ninth-largest digital asset by market capitalization, up 11% over the past 24 hours, trading hands at $0.073.

The cryptocurrency market bled last week after uncertainty surrounding the collapse of Silicon Valley Bank spooked investors. At one point on Friday, Bitcoin’s price fell to as low as $19,662.

SVB suffered a $42 billion bank run on Thursday, with Nasdaq halting trading in the bank’s shares and regulators shutting down the institution on Friday. A number of crypto companies admitted their exposure to the company through the weekend, causing the prices of every coin and token to drop.

Circle, the issuer of the USDC stablecoin, revealed that it had $3 billion locked up in the bank. Stablecoin, the fifth-largest digital asset by market capitalization, lost its peg to the dollar following the news — falling as low as 87 cents at one point.

Then on Sunday, New York State financial regulators decided to shut down Signature Bank, citing systemic risk.

But the Federal Reserve, the US Treasury and the FDIC said on Sunday that depositors from SVB and Signature Bank would be able to get their funds out on Monday – reassuring investors that the situation was under control.

The Biden administration has insisted that losses incurred by these banks “will not be borne by taxpayers” and should not be considered a “bailout.” After all, shareholders in these banks will be wiped out, and the management has been fired.

But not everyone agrees with the administration’s description. The Wall Street Journaleditorial office today did not cut the words: “This is a de facto bailout of the banking system, even though regulators and Biden officials have been telling us the economy is great and there was nothing to worry about.”

The USDC has now regained its peg, sparking optimism among investors putting money into the digital asset space.

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