After three consecutive weeks of losses, the two largest cryptocurrencies on the market have again given relief to investors by engaging impressive highs over the last week.
Bitcoin (BTC) has surged 36% over the past seven days and is now trading around $27,515, according to data from CoinMarketCap.
Last week, Bitcoin dropped around 10% in reaction to news that Signature Bank and Silicon Valley Bank (SVB), which serve large companies in the crypto sector, went bankrupt.
The second largest coin in the sector, Ethereum (ETH), has returned to the level it was before the crisis. ETH is up 27% in the seven days and is currently changing hands around $1,830.
The entire cryptocurrency market came back to life last Sunday night (12), after the Federal Reserve, US Treasury and FDIC announced that they would step in to protect all deposits held at Signature and SVB — a pledge reiterated by the President Joe Biden.
The effects of the banking crisis on the crypto environment
However, cryptocurrencies have not been entirely unscathed: the industry has lost its two most crypto-friendly banks and there are conflicting reports about whether the FDIC is telling would-be buyers of Signature Bank that the bank will have to drop its dealings with crypto companies.
Former Massachusetts Congressman Barney Frank claimed the government shut down Signature to send an “anti-crypto message”. A Reuters report later in the week appeared to confirm Frank’s claims; the FDIC has since denied the allegations made by Reuters.
In the UK, Chancellor of the Exchequer Jeremy Hunt announced that HM Treasury – the UK Treasury – had negotiated a rescue deal in which HSBC acquired the British arm of SVB to prevent British businesses from suffering losses from exposure to Bank.
In addition to these interventions, investors have been drawn over the past week to risky assets such as cryptocurrencies and tech stocks after signs emerged that the banking crisis could be spilling over into Europe’s traditional financial institutions: Credit Suisse. announced on Wednesday a $54 billion loan from the Swiss National Bank to bolster its liquidity.
Virtually all of the top 30 cryptocurrencies by market capitalization have posted significant gains this week. On the list of biggest highlights beyond Bitcoin and Ethereum are Filecoin (FIL), which is up 33% to $6.39, Polygon (MATIC), which is up 22% to $1.24, Solana (SOL), which is up 28%, to $22.30, and BNB, which is up 25%, to $344.
USDC — the dollar-backed stablecoin issued by Circle — dropped last weekend to as low as $0.87 after uncertainty over the company’s exposure to failed U.S. banks, but regained its dollar-peership over the week. .
* Translated and edited with permission from decrypt.co.