This Week in Coins: Bitcoin, Ethereum Post Mega Rally After Bank Intervention
This week in coins. Illustration by Mitchell Preffer for Decrypt.
After three consecutive weeks of lossesprices turned green for holders of the two largest cryptocurrencies by market capitalization this week.
Bitcoin (BTC) rallied 36% over the past seven days and is now trading at around $27,515 according to CoinMarketCap data.
Last week, Bitcoin fell around 10% in reaction to the news that both Signature Bank and Silicon Valley Bank (SVB) had failed.
The industry’s No. 2 coin, Ethereum (ETH), is back where it was before the downturn. ETH is up 27% in the seven days and is currently changing hands at $1,832.
The entire crypto market came back to life from last Sunday night after the Federal Reserve, the US Treasury and the FDIC announced that they would move to freeze all deposits with Signature and SVB. That the promise was repeated by President Biden.
However, crypto didn’t emerge completely unscathed: the industry has lost its two most crypto-friendly banks, and now conflicting reports are swirling about whether the FDIC is tell potential buyers by Signature Bank that it will have to give away the bank’s crypto business. Former Massachusetts Congressman Barney Frank claimed the Feds shut down Signature to send an “anti-crypto message” and a Reuters the report late in the week appeared to confirm Frank’s claims; The FDIC has since denied the allegations in the Reuters history.
Over in the UK, Chancellor of the Exchequer Jeremy Hunt announced that HM Treasury – the British Treasury – had brokered a rescue deal in which HSBC bought the UK arm of SVB for £1 to create entire UK businesses with exposure to the bank.
In addition to these interventions, investors were drawn into risk assets such as crypto and technology stocks this week after signs emerged that the banking crisis could spill over into Europe’s TradFi institutions: Credit Suisse announced Wednesday a Loans of 54 billion dollars from the Swiss National Bank to strengthen its liquidity.
Virtually all of the thirty largest cryptocurrencies by market capitalization posted significant gains this week, but some of the biggest winners aside from Bitcoin and Ethereum were Filecoin (FIL), which rose 33% to $6.39, Polygon (MATIC), which grew 22% to $1.24, Solana (SOL), which rose 28% to $22.30, and BNB, which climbed 25% to $344.76.
USDC – the dollar-pegged stablecoin issued by Circle – slipped last weekend, falling all the way to 87 cents following uncertainty over the company’s exposure to the beleaguered banks. It restabilized this week in reaction to the rescue news.
