Cryptocurrencies resume the rally this Friday (17) as more cracks appear in the US banking sector, where another bank, First Republic, had to be rescued.
Bitcoin (BTC) soars 6.6% in the last 24 hours, quoted at $26,499.88, according to data from Coingecko. In reais, BTC is up 5.3%, trading at R$137,051.77, according to the Bitcoin Portal Index (IPB).
Ethereum (ETH) is up 4.4% to $1,734.03.
Blockchain developers have already confirmed the date for the next Shanghai update, when the roughly $30 billion worth of ETH locked up will be able to be withdrawn: April 12.
The main altcoins also operate with gains, among them BNB (+5.3%), XRP (+2.2%), Cardano (+3%), Polygon (+5.3%), Dogecoin (+6.1 %), Solana (+4%), Polkadot (+5%), Shiba Inu (+3.2%) and Avalanche (+5.3%).
bitcoin today
Bitcoin’s appreciation tracks gains in the global cryptocurrency market, whose value has risen by more than 4% over the past day to $1.17 trillion.
Despite the good phase of Bitcoin, 21Shares, manager of products linked to exchange-traded crypto assets, decided to close five funds and cancel the registration request of another. According to a spokesman for the company, the decision was motivated by low demand from investors.
Zug, Switzerland-based 21Shares will shut down five products: the 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC); the 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH); the 21Shares DeFi 10 Infrastructure ETP (DEFII); the 21Shares Crypto Layer 1 ETP (LAY1) and the 21Shares USD Yield ETP (USDY).
The last trading day for ETPs will be on April 6th.
Meanwhile, ARK Investment Management, owned by popostar manager Cathie Wood, raised more than $16 million from investors for cryptocurrency-focused funds, according to filings with the SEC, the U.S. CVM, released by Bloomberg.
The Hashdex management team celebrated the six-month anniversary of the Hashdex Bitcoin Futures ETF fund by ringing the opening bell of the New York Stock Exchange (NYSE) trading session on Wednesday (15).
US banking crisis
In another chapter of the crisis that hits the financial sector in the USA, the biggest banks in the country came together to rescue First Republic Bank with capital injections that totaled US$ 30 billion, in an effort to prevent the growing panic with the recent bankruptcies .
First Republic executives met in recent days to craft the plan, which was discussed with US Treasury Secretary Janet Yellen and other officials and regulators in Washington, people familiar with the matter told the Wall Street Journal.
Among the banks participating in the rescue operation are JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, US Bancorp, Truist Financial, according to information from Bloomberg.
The bank is studying strategic options, including a possible sale. First Republic shares plummeted after regulators took control of Silicon Valley Bank and Signature Bank last week.
Signature, by the way, is for sale, but the FDIC, which oversees the US banking sector, denied a Reuters report that the potential buyer would be barred from working with the crypto industry.
An FDIC spokesperson told CoinDesk in an email that “the liquidation does not end until all of the bank’s assets are sold,” all of the bank’s outstanding claims are covered, and “the acquirer decides the terms of its offer.”
The buyer will tell the FDIC “which assets and liabilities of the failed bank it is willing to assume,” the spokesman said, citing the agency’s resolution manual.
USDC redemptions
Traders redeemed $3 billion net of stablecoin USDC in three days amid the impact of the Silicon Valley Bank bankruptcy on the digital asset market.
On its blog, Circle, which operates USDC, said it has processed $3.8 billion in stablecoin redemptions (investors who exchanged their tokens for dollars) and issued $800 million more of the digital currency, which explains the conversions of US$ 3 billion between Monday and Wednesday (15).
Over the past seven days, redemptions amount to $6 billion, according to data from CoinGecko cited by Reuters.
USDC is the second largest stablecoin – whose value seeks to maintain parity with the dollar – with a capitalization of around US$ 37 billion.
The token dropped as low as $0.87 on Sunday (12) after Circle revealed it had $3.3 billion in USDC reserves trapped in the SVB.
Sources told the Wall Street Journal that Ken Griffin’s Citadel fund offered to buy at a discount the $3.3 billion in deposits Circle held at the Californian bank before it was taken over by regulators.
Circle’s USDC has since regained parity after token issuance and burning, but the crisis of confidence continues, with other stablecoins such as leader Tether (USDT) whose market cap is now double the volume of USDC, Dai (DAI), TrueUSD (TUSD) and Liquidity USD (LUSD) gaining ground.
Support from major banks
The crisis hitting small and regional financial institutions in the US has hampered Circle’s plans to deposit its reserves in so-called community banks.
In an interview with Bloomberg, Circle CEO Jeremy Allaire said the company plans to keep all the money backing its stablecoin in the biggest global banks.
“We’re going to need to rely more on the systemically important banks, which have this structural support and a slightly different profile now,” Allaire said. “We see this as a general market phenomenon.”
All USDC cash reserves are held at the Bank of New York Mellon, Allaire said. The value represents about 20% of the assets that guarantee the USDC, or about US$ 9.7 billion, according to data on Monday (13).
The rest of the guarantees consist of short-term US Treasury bonds, which are managed by BlackRock, the world’s largest asset manager, explained the executive.
In the case of TUSD, Archblock, the issuer of the stablecoin, transferred $1 billion to Capital Union Bank in the Bahamas following the failure of banks in the US.
private credit
The failure of Silicon Valley Bank and turmoil at other regional US banks opened the door for private lending firms to strike profitable lending deals with entrepreneurs and venture capitalists, according to Bloomberg.
While banks like SVB rely heavily on deposits for loans, private lending companies sign contracts with institutional investors, such as pension funds, who commit to providing capital in pursuit of above-market returns, typically for several years.
Impact in Brazil
With the collapse of Signature Bank and Silvergate Capital in the US, crypto companies lost an important link with the traditional financial system.
Experts heard by InfoMoney believe that Brazil is in a different position and that regulators do not show the same hostile stance towards the crypto industry seen recently among authorities in the US.
“The Central Bank is working on its Real Digital project, while the CVM has been exercising its role as guardian of the capital market and has been involved in discussions about tokenized securities, for example,” said Fabricio Tota, Director of New Business from MB.
“It is important to remember that, in general, Brazilian authorities have been open to dialogue with the crypto market and have shown an interest in fostering financial innovation,” said Tota.
This stimulus to innovation, by the way, was highlighted by BlackRock’s CEO, Larry Fink, in his annual letter to shareholders.
“In many markets such as India, Brazil and parts of Africa, we are witnessing a giant leap forward in digital payments and cost reduction and financial inclusion. In contrast, many developed markets, including the US, are lagging behind in innovation, leaving payment system costs much higher,” said Fink.
Braiscompany’s mea culpa
While the Brazilian crypto market advances innovative projects, consumers still suffer the consequences of scams by companies looking for easy profit.
On the run from the police, businessman Antônio Neto Ais, founder of Braiscompany, went to Instagram to send a message in all caps: “THE RESPONSIBILITY IS TOTALLY MINE!
It is the main communication from Ais since his company, suspected of creating a BRL 1.5 billion financial pyramid using Bitcoin, was the target of a police operation that brought down the scheme, exactly one month ago.
Despite the bombastic phrase, the businessman used the text to exempt himself from blame for embezzlement in customers. He won’t say where he is or if he plans to turn himself in.
Meanwhile, another company from Campina Grande (PB) is suspected of defaulting on BRL 420 million with cryptocurrencies, according to InfoMoney.
On Thursday (16), the Public Ministry of Paraíba (MPPB), through MP-Procon, confirmed that there is an open administrative procedure to follow up on alleged problems at Fiji Solutions, which claims to work with crypto. Founded at the end of 2021, the company has not released investor withdrawals since last month.
Other cryptocurrency highlights
Banco Santander’s Mexican arm plans to launch Openbank digital bank until the end of March 2024 to offer current accounts, credit cards and other services over time, the head of the local unit said on Thursday (16).
“We need to ‘tropicalize’ it and adapt it to the Mexican market and regulations,” said the head of Santander in Mexico, Felipe Garcia, in an interview with Reuters, adding that, as the digital bank already operates in Argentina and in some countries Europeans, the operation will not start from scratch.
A group of investors decided to raise $100 million for a fund focused on Bitcoin, even with the crisis in the cryptocurrency market. Called the Bitcoin Opportunity Fund, the vehicle caters to high-income investors looking to diversify their portfolio with the world’s largest cryptocurrency, according to Bloomberg.
Rio de Janeiro will host the Web Summit 2023 in May, one of the biggest technology events in the world, according to the newspaper O Globo. The event is seen by the City Hall as an important step towards transforming the municipality into a great technology capital. Held annually from 2009 in Dublin until 2015 and then in Lisbon from 2016, in this edition the event takes place outside Europe for the first time. Rio will host the event for the next six years, until 2028.
