SHAFAQNA TURKEY-Silicon Valley Bank announced that it would protect savers, and on March 22, there was a quick recovery in bitcoin with the expectation of a 25 basis point interest rate hike, not 50, from the Fed. The world’s largest cryptocurrency is up 8.7% on the day to $22,455. Thus, he erased all the losses he had experienced in the last week.
Cryptocurrency investors are closely following what has been happening in recent days at Silicon Valley Bank (SVB) in the US. The most important reason for this was that Circle, the provider of USDC, which was the second largest stablecoin by market capitalization at the failed bank, had a reserve of $3.3 billion with that bank.
Following the SVB bankruptcy, there were significant sales in the USDC, raising questions about what the source would be. For this reason, USDC was unable to hold on to $1 as it should and fell below $0.90 on Saturday. This, in turn, contributed to the loss of confidence and sales in the cryptocurrency market as a whole.
However, when the Fed and the US Treasury announced that savers would be protected in the SVB, concerns about the Krug, and therefore the USDC, dissipated. As of this morning, USDC has risen above $0.99.
In addition, the recent bankruptcies have reinforced the expectation that the Fed will raise interest rates by 25 basis points instead of 50 on March 22. Earlier, Fed Chairman Jerome Powell said in a speech to the Senate Banking Committee that the Fed could raise interest rates faster and faster than expected to curb inflation.
LOOK UNDER $20,000
Prior to these announcements, bitcoin was hovering around $22,400. Spurred on by the announcements, a 50 basis point rate hike began, and when the SVB was added to that, Bitcoin fell below $20,000 on Friday.
However, today it became clear that Circle’s money would not “evaporate”, and the future of the Fed’s 25 basis point rate hike on March 22 began to be priced in. For this reason, Bitcoin is up 8.7% on the day to $22,455 this morning.
POSITIVE WIND IN THE MARKET
A positive headwind has spread throughout the cryptocurrency market. Ethereum added 7.9% to $1,605.
Binance Coin is up 7.4%, Cardano (ADA) is up 10%, Polygon is up 6.7%, Dogecoin is up 5.4% and Solana is up 8.7%.
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