Bitcoin, Ethereum price rises despite banking problems, Stablecoins Depeg
The crypto market is witnessing a massive crisis as crypto-friendly banks Silvergate, Silicon Valley Bank, and now Signature Bank face bank runs. The “bank run” driven by depositors withdrawing money from the bank causes stablecoins to be pegged to the US dollar. Many stablecoins, especially Circle’s USDC, have depegged and are creating a systemic effect on other stablecoins and cryptocurrencies.
Why Bitcoin Price Rises Despite Market Crisis
Bitcoin price ins is trending higher as it trades at $300 prize
on Coin base right now. The Coinbase Premium Index for Bitcoin has hit a 26-month high.
Coinbase Premium is the percentage difference between Coinbase Pro price (USD pair) and Binance price (USDT pair). Generally, higher premium values indicate that investors in the US are buying Bitcoin on Coinbase.
However, Circle’s massive exposure to the $3.3 billion USDC stablecoin against Silicon Valley Bank and other stablecoins that rely on USDC has led to a massive imbalance in the Bitcoin price.
As investors move away from USDC, the BTC premium on Coinbase jumps massively as their order books merge with USD and USDC. Bitcoin premium means massive negative funding in perpetuity. Experts believe that people think it’s a short squeeze, but data shows otherwise.
Bitcoin price is currently trading at $20,426, up over 3% in the last 24 hours. The 24-hour low and high for BTC price are $19,628 and $20,792 respectively.
Also read: Elon Musk shows interest in buying The Troubled Silicon Valley Bank
Why Ethereum price is rising?
Ethereum price soars higher as gas taxes rise after crypto market’s ties to banks continue to fade. According to data from Etherscan, average gas charges jumped above 300 gwei today against previous median gas charges of 32-40 gwei.
Uniswap, USD Coin and 1inch are the top three gas guzzlers for Ethereum, indicating that investors are converting their USDC coins to Ethereum.
The Ethereum price is currently trading at $1,463, up 5% in the last 24 hours. The 24-hour low and high are $1,378 and $1,481 respectively.
Also Read: USDC’s dollar stick fumbles, Coinbase pauses USDC:USD conversions
