Bitcoin Jumps Above USD 24,000, Leading Crypto Gains As US Acts To Stop Banks

Bitcoin continued to gain momentum in Tuesday morning trade in Asia after a setback yesterday as regulators acted to shut down the US banking industry following failures at the California-based lender, a move that also helped restore parity to the USDC stablecoin. Most of the top 10 non-stablecoin cryptocurrencies got. However, US stocks closed mixed on Monday, rattled by bank failures, as speculation mounted that the banking crisis could prompt the Federal Reserve to halt plans to raise interest rates.

See related article: Banks bring systemic risk to crypto, says Circle’s Disparte

Fast facts

• Bitcoin rose 7.21% in the past 24 hours to $24,251 at 09:00 in Hong Kong, according to CoinMarketCap data. The world’s largest cryptocurrency is up 8% in the past seven days, after erasing losses earlier in the month when crypto-linked bank Silvergate failed, triggering a selloff in the crypto market.

• Ether rose 3.08% to $1,673, a gain of 6.84% in the last seven days.

• Crypto exchange Binance’s BNB token jumped 5.09% to US$308.94, posting the second biggest gain in the top 10 by market capitalization and rising 7.06% for the seven-day period. Binance CEO Changpeng Zhao tweeted on Monday that Binance will convert its USD 1 billion Industry Recovery Initiative funds from BUSD to cryptocurrencies including BNB, Bitcoin and Ether, offering buying support to the crypto market given the volatility of stablecoins and banks.

• USD Coin (USDC), the second-largest stablecoin by market cap that briefly lost its link to the US dollar over the weekend, has recovered to $0.9987, according to CoinMarketCap. Circle, the issuer of USDC, announced a new partnership with New Jersey-based Cross River Bank on Monday, following the closure of Silicon Valley Bank.

• XRP fell 1.26% to $0.3715 to lead the losers, but still traded up 0.73% for the week. Crypto transaction tracker Whale Alert reported a wave of large XRP transactions on Monday, totaling over 916 million XRP.

• The total crypto market capitalization rose 4.61% in the last 24 hours to $1.08 trillion. Total trading volume in the last 24 hours rose 35.57% to 93.65 billion USD.

• US stocks closed mixed on Monday. The Dow Jones Industrial Average fell 0.28%, the S&P 500 fell 0.15% and the Nasdaq Composite Index rose 0.45%.

• US bank shares were hit hard despite assurances from US regulators and President Joe Biden that deposits are protected. First Republic, a bank headquartered in San Francisco, fell more than 60% and was briefly suspended from trading, according to CNBC.

• Until March brought its banking woes, investors had been focused on what will be the size of the next rate hike by the Federal Reserve to curb inflation. But the banking problems have fueled speculation that the Fed may put this policy on hold. Goldman Sachs said the Fed is unlikely to raise interest rates at its next meeting on March 22, reversing an earlier forecast of a 25 basis point increase, according to Reuters on Monday.

• The main inflation indicator out this week is the US consumer price index for February (CPI), released by the Labor Department on Tuesday. A Reuters poll forecast CPI to rise 0.6% month-on-month and 6% year-over-year, down from 6.4% for the year ended January 2023 but still well ahead of the Fed’s stated goal of keeping annual inflation below 2%.

• Analysts at CME Group expect a 65.0% chance the Fed will raise interest rates by 25 basis points this month. The chance of no interest rate increase is 35%.

• Interest rates in the US are between 4.5% and 4.75%, the highest since October 2007.

See related article: Circle’s USDC stablecoin regains parity as regulators act to stem banking risks