Bitcoin price witnessed a surge of 14.26% in the last 24 hours, opening Monday’s trading day at $23,596. This comes as a recovery from the accumulated losses of last week’s fall of crypto-friendly Silicon Valley Bank and USDC.
BTC surges after US authorities secure depositors of collapsed banks
The surge in BTC price came after the joint statement issued by the Treasury Department and Federal Deposit Insurance Corporation (FDIC) stating that they will take measures to protect depositors of the collapsed Silicon Valley Bank.
The statement mentioned that the FDIC will complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors, who will have access to all of their money as of Monday, March 13.
The announcement came as a relief to the cryptocurrency sector, as billions of dollars belonging to several cryptocurrencies were held up in both banks.
This announcement triggered an explosion in the price of bitcoin, which rose 14.26% in the last 24 hours, to trade at $23,596 at the time of writing.
Bitcoin strengthens in the face of adversity
The recent problems affecting the ecosystem seem to evidence the strength of BTC. Late last week, US authorities shut down Silicon Valley Bank, the largest US bank failure since the 2008 financial crisis, shaking global markets and stranding billions of dollars belonging to businesses and investors.
Among those affected was USDC stablecoin issuer Circle. The company held $3.3 billion of its $40 billion USDC reserves at the collapsed bank, according to a statement issued by the firm on Friday.
The news generated fear among investors, who began to switch their USDC reserves to other stable currencies, which caused Circle’s cryptocurrency to lose parity with the US dollar, trading at $0.85. This caused it to lose 15.35% of its value in a matter of hours.
Despite all odds, the event that affected the second-largest stablecoin in the market strengthened the price of bitcoin. BTC rose 3.48%, to go from a low of $20,068 to $20,792.
The cryptocurrency was coming from a week in which it lost about 10% of its value, to falling below $20,000 for the first time since last January 14.
BTC’s positive response to stablecoin falls
This is not the first time that bitcoin has reacted positively to the fall of a stablecoin. According to CoinMarketCap data, on October 15, 2018, BTC rose from $6,292 to a high of $6,965 amid USDT’s decoupling from the U.S. dollar following scrutiny over whether Tether Inc. really had enough reserves for its stablecoin cryptocurrency.
The impact of recent events on the crypto ecosystem
The recent events surrounding the collapse of Silicon Valley Bank and USDC highlight the vulnerabilities of the crypto ecosystem. However, BTC’s positive response to the situation proves its resilience and ability to recover from adverse events.
It is also a reminder of the importance of diversification in the crypto market and the need for stablecoins that are truly backed by reserves.
The surge in BTC price in the last 24 hours comes as a recovery from the accumulated losses of last week’s fall of crypto-friendly Silicon Valley Bank and USDC. BTC’s positive response to the situation proves its resilience and ability to recover from adverse events.
The recent events surrounding the collapse of Silicon Valley Bank and USDC highlight the vulnerabilities of the crypto ecosystem and the need for stablecoins that are truly backed by reserves.
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