Bitcoin Surges by Nearly 20% Following the “Bailout” of Silicon Valley Bank.
Bitcoin’s price has been boosted by regulators and the US Biden Administration reassuring investors that depositors in the collapsed Silicon Valley Bank will be compensated, and that the US banking system remains stable. The cryptocurrency’s value has risen 19.8% in the previous day to $24,428, while Ethereum’s value increased 15% to $1,680. Despite SVB’s collapse having caused cryptocurrency prices to plummet last week, Bitcoin is now up almost 20% in the previous day and 6% in the last hour. Other cryptocurrencies, including Dogecoin, are also up. Regulators closed SVB on Friday due to a $42bn bank run, and during the weekend, a number of cryptocurrency businesses revealed their exposure to the company, prompting a drop in all cryptocurrency-token prices. Circle, which created USDC stablecoin, revealed it had $3bn in cash on hand, which helped restore the peg of the dollar, and investors were reassured on Sunday that depositors would be able to withdraw their money. The Biden Administration has reiterated that taxpayers will not shoulder these institutions’ losses, with SVB management sacked and stockholders set to lose everything. The reassurance that SVB’s loss will not destabilise the financial sector has boosted investor confidence in the digital asset market.