Does the US banking collapse bring faith in BTC and ETH?
Bitcoin and Ethereum are up more than 15% in the last 72 hours
This week the crypto market has been volatile because higher interest in the USA squeezed three prominent US financial institutions serving the tech sector. After that, the U.S. Treasury Department and Federal Reserve ensure the customers are safe while bond and equity holders may need to face the loss. After this news, Bitcoin and Ethereum soared to recent highs of around $24k and $1700, respectively.
Last week on March 8th, the Silvergate Bank serving the crypto industry suffered from a lack of its reserve. Last Friday, The CFPI (California Department of Financial Protection and Innovation) closed Silicon Valley Bank (SVB) after the bank needed around $2.25B to honor deposits. The stock price of the SVB bank suffered after the solvency issues broke in the market.
However, the crypto market has outperformed all the major global equity indices, especially in terms of recovering from such news.
On Sunday, New York financial regulators closed Signature Bank, which also serves the crypto industry and technology sectors. The authorities fear the operation of such banks might pose a systematic risk to the broader financial ecosystem.
Later a joint statement from the U.S. Treasury Department, Federal Reserve, and FDIC announced that customers of these banks have full access to their funds and no losses will be borne by the taxpayers.
Another factor that is driving the crypto market up is the decentralized feature of these cryptocurrencies. It means all these coins’ values are not regulated by any central authority.
As a result, trust in cryptocurrencies is back, and it will impact the overall performance of cryptocurrencies. Traders and investors can check out long-term crypto predictions before investing in any crypto coins. It is now working as a parallel economy of the centralized financial ecosystem.
Both of these blue-chip cryptocurrencies are trading above the 50 days and 100 days moving averages that suggest a strong bullish momentum, at least for the short term.