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Tuesday, March 21, 2023

Bitcoin exploded: the main cryptocurrency flew more than 16%

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Bitcoin, the largest of the cryptocurrencies, lives a day of euphoria with a shot of more than 16%, after the US authorities announced plans to limit the consequences of the bankruptcy of Silicon Valley Bank (SVB) and that the issuer of “stable currency” USD Coin said that it was still exchangeable with the dollar.

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Thus, Bitcoin exceeded $24,000, a line that it had not shown since mid-February, and which in fact was already the highest since August of last year.

US authorities launched emergency measures on Sunday to shore up confidence in the banking system after the bankruptcy of the SVB threatened to unleash a financial crisis and said the bank’s clients would have access to their deposits from Monday.

USD Coin, also known as USDC, was recovering to $0.9917 from the all-time low of $0.87 hit on Saturday, well below its expected 1:1 parity against the dollar. The drop was due to concerns about the SVB exposure of Circle, the US company that issues USDC.

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Jeremy Allaire, Circle’s chief executive, said in a tweet on Sunday that the company’s $3.3 billion USDC reserve deposit – about 8% of its total – held at the collapsed SVB Bank would be fully available when banks Americans open on Monday.

Learn more – HSBC to the rescue: bought the UK headquarters of the SVB for £1

Stablecoins like USDC, the second largest by market size, are a crucial cog in the world of cryptocurrency trading. They are designed to maintain a stable value and are usually backed by reserves of traditional assets such as dollars, bonds, or gold.

Stocks exposed to cryptocurrency also rose.

In pre-open trading for the US markets, cryptocurrency miners Riot Blockchain and Marathon Digital, cryptocurrency exchange Coinbase Global and software developer MicroStrategy Inc also rallied from last week’s lows to gain between 6 ,5% and 10%.

Source: Ambito

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