Bitcoin increases by more than 9% as the US takes action to safeguard bank deposits linked to cryptocurrencies

As U.S. banking regulators took control of Silicon Valley Bank and Signature Bank, two institutions with ties to the cryptocurrency industry, and guaranteed deposits at the institutions as well as additional backstops for the banking sector, Bitcoin and Ether led a significant price recovery in the top 10 non-stablecoin cryptocurrencies in morning trading in Asia. The actions came after Silvergate Capital's collapse last week, which increased the risk of a systemic bank run. Gains were headed by Solana. Quick Facts According to CoinMarketCap statistics, Bitcoin increased 9.60% in the last day to US$22,601 at 9:00 a.m. in Hong Kong. Bitcoin increased 9.77% to $1,621 USD. Solana led the gainers with a 12.85% increase to US$20.38, but it still has a ways to go as it has lost 2.93% over the past seven days. According to Circle, the company that issuing USD Coin (USDC), the second-largest stablecoin by market capitalization, traded back in line with its U.S. dollar peg on Monday morning in Asia after temporarily losing it due to Silicon Valley Bank's failure, where it had about US$3 billion in deposits. On Saturday, USDC dropped to US$0.8774 and its market cap declined 15% to US$36 billion from US$43 billion. The same day, Circle announced that it had the resources to support USDC and that it would continue to be redeemable 1:1 for US dollars. The most current USDC price was $0.9941. All Circle deposits will be accessible on Monday when institutions open, according to Circle CEO Jeremy Allaire. In the last day, the overall market value of cryptocurrencies increased by 6.47% to US$1.01 trillion. Over the previous 24 hours, the total trading amount decreased 34.52% to US$60.19 billion. U.S. stocks fell on Friday. The S&P 500 declined 1.45%, the Nasdaq Composite Index was down 1.76%, and the Dow Jones Industrial Average decreased by 1.07%. Following the loss of Silicon Valley Bank, the largest U.S. bank failure since 2008, which was taken over by the FDIC on Friday, the stock market fell. On Monday morning in Asia, however, U.S. stock futures were trading higher, indicating the steps taken to support the U.S. banking sector. Investors had to deal with the Labor Department's Friday job report, which revealed that February nonfarm payrolls came in at 311,000, exceeding the projected 225,000. This was despite the banking concerns. This supports the theory that, in order to reduce inflation, the Federal Reserve may increase interest rates more than initially anticipated. However, analysts at the CME Group forecast a 17.4% possibility of a 50 basis point hike this month, a sharp decline from 60.9% last Friday as banking failures are currently the focus of attention and concern. This reflects the belief that, in the midst of a string of bank failures, the Fed is unlikely to increase rates by that much. The CME predicts an 82.6% likelihood that the Fed will increase interest rates by the anticipated 25 basis points this month, but other commentators claim that the Fed may delay any rise until next month due to concerns in the banking sector. The Federal Reserve will decide on interest rates at its meeting on March 22. Rates are presently between 4.5% and 4.75%, which is the highest level since October 2007. According to Labor Department statistics released on February 14, the United States' annual inflation rate for the year ended January 2023 was 6.4%, significantly higher than the Federal Reserve's long-term target of keeping inflation within a 2% band. At 8:30 a.m. Eastern Standard Time on March 14, there will be another report on inflation.