Following Silicon Valley Bank’s “bailout,” Bitcoin increases by almost 20%.

Since regulators and the Joe Biden Administration intervened to reassure investors that depositors in the collapsed Silicon Valley Bank will be made whole—and that the U.S. banking system remains on stable ground—the price of Bitcoin has surged, rising 19.8% in the previous day.

According to CoinGecko, Bitcoin was trading for $24,428 at the time of writing, up almost 20% in the previous day and 6% in the previous hour. The second-largest digital asset, Ethereum, rose 3.4% in the last hour to reach a price of $1,680, up 15% over the previous 24 hours.

The remainder of the cryptocurrency market is also up, with Dogecoin, the ninth-largest digital asset by market capitalization, up 11% in the previous day and currently selling for $0.073.

The uncertainty surrounding Silicon Valley Bank’s crash frightened investors, and the Bitcoin market began to suffer last week. The cost of Bitcoin fell to as low as $19,662 at one point on Friday.

The Nasdaq stopped trading in SVB’s shares on Thursday as a result of a $42 billion bank run, and regulators closed the institution on Friday. Throughout the weekend, a number of cryptocurrency businesses disclosed their exposure to the company, which caused the prices of all coins and tokens to crash.

Circle Comes to USDC’s Rescue

The company that created the USDC stablecoin, Circle, disclosed that it had $3 billion in cash on hand. Following the revelation, the stablecoin, which is currently the fifth-largest digital asset by market capitalization, lost its peg to the dollar, dropping as low as 87 cents at one point.

Then, on Sunday, the financial watchdogs for New York State decided to close down Signature Bank due to system risk. Investors were reassured that the issue was under control when the Federal Reserve, U.S. Treasury, and FDIC announced on Sunday that depositors of SVB and Signature Bank would be allowed to withdraw their money on Monday.

The Biden Administration has stressed that taxpayers will not bear these institutions’ losses and that they should not be viewed as a “bailout.” After all, management has been sacked, and stockholders in these banks will lose everything.

Yet, not everyone concurs with the administration’s assessment.

Today’s Wall Street Journal editorial board was unambiguous in their assessment:

This is a de facto rescue of the banking system, despite the fact that regulators and Biden administration representatives have been telling us the economy is strong and there was no need for concern.

Now that USDC has reclaimed its peg, investors are more confident about investing money in the digital asset market.

Related

• There’s no need to panic about the USDC depegging
• President Biden promises to hold accountable those who caused SVB and Signature collapse
• Circle finally assures investors that it will support USDC