Bitcoin is truly an amazing asset. No matter what happens in the economy, no matter how bad things get, the world’s number one digital currency by market cap is still striving to do as well as it can, and its recent price rally – despite the collapse of financial institutions such as Silvergate and Silicon Valley Bank – is proof of this.
Bitcoin Continues to Impress Us All
To be fair, bitcoin has received a fair bit of support given that these banks and others like them that have experienced collapses in recent days are now getting bailed out through government means. FDIC is stepping in to ensure that anyone with funds missing will have their money replaced. This has given bitcoin the support it needed to shoot up by more than $3,000 at the time of writing.
Following the initial news that these named banks were imploding, bitcoin experienced a massive price hit and fell below the $20K mark for the first time in about two or three months. However, now the currency has shot beyond the $22,000 line, and it looks like the rally is set to continue in the coming weeks and months according to various analysts.
The Treasury and the Federal Reserve issued a joint statement that reads as follows:
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary (Janet) Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.
Regulators also issued follow up remarks, claiming nobody who lost money due to the banks’ incompetence or mistakes will stand to lose out. They mentioned:
No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
Responding to the words in the initial Fed/Treasury statement, Vijay Ayyar – vice president of corporate development and international at crypto exchange Luno – said:
Given the Fed announcement over the weekend of a backstop for banks and specifically Silicon Valley Bank, markets have turned euphoric knowing that depositors’ money is safe, and a major potential bank run has been averted.
A Huge Hike in Just a Few Days
Bitcoin, in just a matter of days, has shot up by more than nine percent, and this is despite news that the bank closings mentioned above are among the worst since the 2008 financial crisis. Yes, FDIC is getting involved, but the situation, in many ways, is a testament to the strength and girth of bitcoin, which has only increased heavily in recent years. It also suggests that the bearish trends of 2022 may finally be coming to an official end.
This marks some truly good news stemming from a story that could have easily been dark and gloomy.
Source: https://www.livebitcoinnews.com/bitcoin-spikes-despite-silicon-valley-bank-drama/