Bitcoin hurtles back above $23,000 as crypto prices buoyed amid US banking woes

Cryptocurrency prices have soared over the past day as U.S. President Joe Biden sought to reassure Americans that the country’s banking system was safe in the wake of the collapses of Silicon Valley Bank and Signature Bank.

Bitcoin jumped 13% by 10:15 a.m. EST to trade above $23,150, according to TradingView data. Ether was up about 12% to over $1,600.

“With huge respect for the stress and pain the past few days have inflicted on entrepreneurs, employees, treasurers, bankers, and anyone sensing panic in the air, I’ll say this bluntly and almost with regret: All this is good for bitcoin,” wrote Noelle Acheson, former head of market insights at Genesis.

Acheson, reflecting on the macro outlook, said it’s now more likely the pace of interest rate increases slows, with an injection of liquidity to prop up banks. She added that bitcoin’s value as a decentralized, seizure-resistant store of value has increased significantly as it contrasts with the fragility of traditional banking.

The Federal Reserve is expected to increase rates again March 22, with an 87% probability of a 25 basis point increase, according to the CME’s FedWatch tool that uses the 30-Day Fed Funds futures pricing data.

“The Fed always follows the fixed income market. The bond market now is demanding that the Fed ease, dramatically,” Ark Invest founder and CEO Cathie Wood wrote on Twitter. “Regulators have focused investors on the threat that crypto poses to users, but this weekend turned that theory upside down.”

Altcoins were also buoyed alongside bitcoin and ether. Binance’s BNB added 12%, Cardano’s ADA increased 13%, and Polygon’s MATIC gained 6%. 

Circle’s USDC stablecoin jumped over 5% to come back within range of its U.S. dollar peg. The stablecoin de-pegged over the weekend after the firm revealed $3.3 billion of its reserves were held at Silicon Valley Bank. CEO Jeremy Allaire said funds are “safe and secure,” and liquidity operations would resume when U.S. banks open today. Coinbase reinstated USDC conversions today. 

Coinbase shares gained 4.7% to trade above $55, by 10:15 a.m. EST, according to TradingView data. MicroStrategy added over 9% as it climbed back above $200. Jack Dorsey’s Block traded down about 3.8% to above $68. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.