Bitcoin Surges Amid Reports of US Officials' Plan to Protect Silicon Valley Bank Deposits
The price of Bitcoin (BTC), the world's largest cryptocurrency, surged to an intraday high of $21,605 on the Bitstamp exchange on Sunday amid reports that US officials appear to be ready to protect all deposits at Silicon Valley Bank (SVB).
SVB's Collapse: Centralized Banking Blamed
The sudden collapse of SVB, the go-to bank for US startups, has led to panic in the technology industry, with finger-pointing among executives and investors. Crypto executives argued that centralized banking was to blame, but as a major crypto company revealed that it had billions of dollars trapped in SVB, the tone shifted.
USD Coin Drops After Circle Internet Financial Reveals Funds Held Up
The USD Coin, a stablecoin, which is supposed to trade at $1, dropped to 87 cents after the cryptocurrency company Circle Internet Financial said that it had $3.3 billion held up in the collapsed SVB. The decline may trigger a wave of selling among holders and put pressure on banks that serve the crypto industry.
US Authorities May Protect Uninsured Deposits
According to a report by The Washington Post on Sunday, US authorities are considering protecting all uninsured deposits at the failed bank. The report cites three anonymous sources. This move could prevent broader contagion in the US financial system.
In a Sunday interview, Treasury Secretary Janet Yellen stated that there would be no government bailout for the troubled bank after its tumultuous collapse. Yet, she also maintained that the depositors of the beleaguered institution would not be left to face the music alone.
It remains to be seen how Bitcoin will perform on Monday, which is expected to be a tumultuous day for the US stock market amid the SVB drama.
Conclusion
The collapse of Silicon Valley Bank has sent shockwaves through the technology industry and the cryptocurrency market. The sudden collapse has led to finger-pointing among executives and investors, with centralized banking being blamed for the debacle. The USD Coin has dropped, triggering fears of a wave of selling among holders and putting pressure on banks that serve the crypto industry. However, reports suggest that US officials may be ready to protect all deposits at SVB to prevent broader contagion in the US financial system. Despite Treasury Secretary Janet Yellen's assurance that there would be no government bailout for the troubled bank, depositors would not be left to face the music alone. It remains to be seen how Bitcoin will perform in the coming days, as the US stock market braces for a tumultuous week amid the SVB drama.
