Bitcoin Surges 30% Weekly on Fed's $300 Billion Bank Bailout: This Week's Crypto Recap

Bitcoin Surges 30% Weekly on Fed's $300 Billion Bank Bailout: This Week's Crypto Recap

Things are changing quickly in the cryptocurrency industry. Within seven days, the market completely changed and sentiment moved out of the fear zone. Total capitalization also skyrocketed, adding a whopping $165 billion in the process. But what happened? Well, let's dive in.

First things first: It is important to note that the price of BTC is currently trading above $26,000, reaching highs last seen nine months ago in June 2022. This represents an increase of 30% and is due to important macroeconomic developments in the United States.

Recall that Silicon Valley Bank – a major financial institution in the US with a significant amount of VC money in deposits – went bankrupt. The bank exposed a hole in its balance sheet and was unable to patch it through a stock offering, scaring depositors trying to get their money out. Within days, authorities shut it down, leaving many people worried about whether they would even receive their deposits.

The US government, faced with the Federal Reserve, the Treasury Department and the FDIC, quickly put together a rescue plan that promised that all depositors would be made whole. And although they refuse to call it a rescue operation, many claim that it is exactly that. US banks borrowed a whopping $300 billion as financial markets reeled after the SVB collapse.

This, in turn, led many investors to believe that the Federal Reserve will no longer raise interest rates to ease the strain on the banking system. In fact, markets are now pricing in the possibility of no rate hike at all, compared to a week ago when they were pricing in a 50 basis point hike.

This has essentially suggested to market speculators that the Fed could even reverse its monetary policy and drive the prices of risky assets like BTC (and almost all other cryptocurrencies) into the stratosphere.

There are many variables and we have yet to see how the whole situation will play out, but for now the crypto markets are reacting incredibly positively to the news. Could it be that BTC is finally fulfilling its purpose of serving as an inflation hedge? Or is this another speculation-driven rally?

In any case, the following weeks will be particularly important and exciting, especially since the Fed will meet on March 22nd.

Market data

Market cap: $1175 billion | 24-hour band: $107 billion | BTC Dominance: 43.7%

Bitcoin:$26,568 (+30.4%) |ETH:$1,725 ​​(+20.1%) |BNB: $331 (+19.7%)

You'd better not miss this week's crypto headlines

3 reasons why Bitcoin exploded to a 9-month high this weekThe price of Bitcoin has risen a whopping 30% in the last seven days. Here are three possible reasons and considerations to consider why this might have happened.

What you need to know about the Arbitrum Airdrop.The wait is finally over. The Arbitrum airdrop is confirmed and ARB will be distributed to eligible addresses on March 23rd. This way you can check if you qualify and how many tokens you will receive.

Who is exposed to the SVB and the Signature Bank? A closer look.Silicon Valley Bank holds money for many customers, and crypto-focused companies are absolutely no exception. In this article we take a closer look at who has exposed their money and to what extent.

HSBC acquires Silicon Valley Bank UK for one pound (report).Europe's largest banking institution - HSBC - bought the British branch of Silicon Valley Bank for one pound. The deal is structured to protect investors and HSBC will provide additional liquidity to the failing bank.

European regulators blast Federal Reserve over bailout of SVB depositors.European regulators are not happy with the Fed's decision to bail out distressed banks. Some have said that this is a “systemic risk exception” approach.

US judge rejects DOJ appeal to stay Voyager-Binance.US $1B deal.Despite the US government's attempts to stop the deal between Binance US and Voyager, the judge overseeing the case has once again rejected the DOJ's appeal. He said this would harm Voyager's customers waiting to receive their money.

Diagrams

This week we have chart analysis of Ethereum, RippleCardano, Binance Coin and Polkadot – click here for the full price analysis.

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