The value of the major cryptocurrency rose on Monday after the U.S. government plans to protect depositors at Silicon Valley Bank and Signature Bank.
The Federal Reserve issued two statements on Sunday with one clear message. Silicon Valley Bank depositors are assisted in a way that their deposits are “fully protected” with or without insurance.
Banking infection risk was lower earlier in the week than it was last Friday, but it’s not zero.
The value of the entire crypto market surpassed $1 trillion on Monday, up about 14% in a single day, after the price of Bitcoin and other crypto assets surged.
Over the past 24 hours, Bitcoin has surged 18.4% above $24,000, while Ethereum has surged 15% to around $1,700, according to data from CoinMarketCap. The two cryptocurrencies with the largest market capitalization are trading parallel to each other.
Image credit: coin market capitalization (opens in new window)
The second-largest stablecoin, USDC, has also recovered by about 4% in the past 24 hours following the news that deposits will be protected, CoinMarketCap data shows.
The alleged stablecoin has spread uncertainty around the $40 billion USDC empire, with $3.3 billion of the total supply of reserves, or about 8.2%, in SVB.
The Circle announced that reserve risk was “removed” as funds became available on Monday morning.
In a statement, Circle co-founder and CEO Jeremy Allaire said, “The trust, security and 1:1 redemption potential of all USDCs in circulation will continue to exist, even as banks influence the cryptocurrency market. As such, it is of the utmost importance to Circle: “We are pleased that the U.S. government and financial regulators are taking important steps to mitigate the risks emanating from the banking system.”
According to data from CoinMarketCap, USDC has a market capitalization of about $40.5 billion and a daily trading volume of $10.9 billion, down 1% over the past 24 hours. At the time this article was published, USDC was millicents away from the $1 peg at $0.993, up 3.9% over the past 24 hours.
The cryptocurrency market, like other major industries, has been in a volatile week after Silvergate Capital, one of the largest banks servicing cryptocurrency companies, announced it would downsize operations and liquidate its banking sector. have become.
Shortly after, Silicon Valley Bank collapsed on Friday, and the major crypto lender, the undersigned bank, was shut down by regulators on Sunday.
However, while the market turmoil appears to be supporting the cryptocurrency market, traders reacted positively to the news, with overall market capitalization rising on Monday.
