This Week in Coins: Bitcoin, Ethereum Post Mega Rallies After Bank Intervention

This week in coins. Illustration by Mitchell Preffer for Decrypt.

After three consecutive weeks of lossesprices turned green for holders of the two largest cryptocurrencies by market capitalization this week.

Bitcoin (BTC) is up 36% in the past seven days and is now trading at around USD 27,515 according to CoinMarketCap data.

Last week, Bitcoin lost about 10% in response to news that the industry-serving Signature Bank and Silicon Valley Bank (SVB) had both filed for bankruptcy.

The number 2 coin in the industry, Ethereum (ETH), is back where it was before the recession. ETH is up 27% over the seven days and is currently trading hands at $1,832.

The entire crypto market came alive again last Sunday evening after the Federal Reserve, US Treasury and FDIC announced they would step in to stop all deposits at Signature and SVB. That promise was repeated by President Biden.

However, crypto didn’t come out entirely unscathed: the industry has lost its two most crypto-friendly banks, and now conflicting reports are swirling about whether the FDIC tell potential buyers of Signature Bank that it will have to jettison the bank’s crypto business. Former Massachusetts congressman Barney Frank claimed the FBI shut down Signature to an “anti-crypto message” and a Reuters report late in the week seemed to confirm Frank’s claims; the FDIC has since rejected the allegations in the Reuters story.

In the UK, Chancellor of the Exchequer Jeremy Hunt announced that the HM Treasury – the UK Treasury – had brokered a bailout involving HSBC acquiring the UK arm of SVB for £1 to make entire UK companies exposed to the bank.

In addition to these interventions, investors this week were drawn to risky assets such as crypto and technology stocks after there were signs that the banking crisis could spill over to Europe’s TradFi institutions: Swiss credit announced on Wednesday a loan of $54 billion of the Swiss National Bank to strengthen its liquidity.

Virtually all of the top thirty cryptocurrencies by market capitalization posted significant gains this week, but some of the biggest gainers besides Bitcoin and Ethereum were Filecoin (FIL), which rose 33% to $6.39, Polygon (MATIC), which rose by 22 % grew to $1.24, Solana (SOL), which rose 28% to $22.30, and BNB, which rose 25% to $344.76.

USDC — the dollar-pegged stablecoin issued by Circle — slid off its peg over the weekend, falling as low as 87 cents after uncertainty about the company’s exposure to the beleaguered banks. It stabilized this week as a reaction to the rescue news.

Leave a Comment