Bitcoin price rises more than 10% while banks are falling sharply

Last week it suddenly became known that Silicon Valley Bank (SVB) was experiencing a bank run, after customers heard that the bank tight on cash. Unfortunately, this is not just any bank, but one that has many large tech companies as customers. The crash has raised fears that SVB is not alone, but bitcoin (BTC) has no qualms about the difficulties. The cryptocurrency has actually increased in value.

Crypto rises, despite SVB exposure

At the time of writing, the bitcoin price is about 22,300 euros – compared to this morning’s low, that is an increase of just over 10%. Other coins are also in the plus, for example, ethereum (ETH) has currently increased by about 8% to almost 1,550 euros.

Meanwhile, the situation at SVB is still dire. The NASDAQ has banned traders from trading any more shares of the bank. In addition, several crypto companies have disclosed that they have exposure to the company, including Ripple, Avalanche, Yuga Labs, and Circle.

The latter’s exposure to SVB triggered a stablecoin run in USDC. Those problems now seem to have been resolved – at least, at the time of writing, USDC is simply worth one US dollar.

Gone full bailout for SVB

The US Treasury Department refuses to offer a full bailout. This is to prevent the US taxpayer from paying the price. Customers do get all their money back thanks to the American version of the Deposit Guarantee Scheme. That is what the US government promised last Sunday. Yet this is a different construction than a full bailout, it could still have adverse consequences.

Other banks are also affected by the fear in the banking sector. For example, ING’s share fell by almost 9% at the opening of the stock exchange. Deutsche Bank was also a hard faller with almost 8%. The American First Republic Bank (FRC) is in even worse shape, this company fell by more than 75% last Friday.

The fear is that the problems at SVB will spread to more banks. US regulators have also made Signature Bank state-owned for security reasons.

Crypto proponents are loudly proclaiming on social media why crypto and blockchain are so important in this. The Block editor Frank Chaparro wrote “Literally long on bitcoin, short on banks. It’s time.” Crypto entrepreneur Anthony Pompliano (also known as “Pomp”) described how the old financial system no longer allows people to express their opinions, now that you are no longer allowed to buy some bank stocks.

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