News

Crypto Markets Show Signs Of Stabilization After SVB Contagion Scare Causes Steep Fall

Key Points:

  • Bitcoin and Ether bounced back with a 4% rise in the past 24 hours following Friday’s sharp decline caused by contagion risks from Silicon Valley Bank’s collapse.
  • However, other cryptocurrencies did not perform similarly, implying that traders were not yet taking risks on lesser-known tokens.
Bitcoin and Ether experienced a 4% rise in the past 24 hours, following a sharp decline on Friday caused by contagion risks from Silicon Valley Bank’s collapse. However, other cryptocurrencies did not perform similarly, implying that traders were not yet taking risks on lesser-known tokens.

Specifically, there were concerns surrounding USD Coin-issuer Circle’s exposure to the bank. Ether reached over $1,450, while Bitcoin surpassed the $20,000 mark on Saturday, showing early signs of market stabilization. At the time of writing, Bitcoin is trading at $20,118 as shown by Coinmarketcap data.

Bitcoin 4-hours Chart, Source: Coinmarketcap

However, other cryptocurrencies did not perform similarly, implying that traders were not yet taking risks on lesser-known tokens. While Polygon’s Matic (MATIC) saw a 1.6% increase, BNB Coin (BNB) and XRP experienced a nominal 2% increase over the last 24 hours.

BNB daily Chart, Source: Coinmarketcap

The market experienced sudden and steep movement on Friday as regulators shut down SVB due to a run on the bank. Traders panicked and sold their token holdings as USD Coin fell to as low as 87 cents on Saturday, leading to a sell-off.

Total crypto market capitalization fell under $920 billion for the first time since November, while over $200 million worth of crypto-tracked futures were liquidated in the past 24 hours. Bitcoin futures worth nearly $60 million were liquidated, the highest among major cryptocurrencies, followed by $40 million in ether futures liquidations. Such liquidations likely contributed to the slide in Bitcoin and Ether.

According to Coindesk, some market analysts, however, brushed off prolonged USD Coin fears by highlighting the token’s backing by the US Treasury. Similarly, Adam Cochran, partner at crypto fund CEHV, suggested that fears about the longevity of USD Coin were exaggerated, given the FDIC-insured nature of SVB.

Cochran pointed to a comparable entity’s experience, where 62% of balances were paid out immediately under the FDIC “advanced dividend” process, with final payments resulting in 94% recovery. If this were similar at SVB, Cochran claimed that Circle’s maximum damage would be $198M on $3.3B.

North Rock Digital co-founder Hal Press added that 77% of Circle’s reserves were held in U.S. Treasury bills, citing official documents, which meant that the theoretical floor price of USD Coin was 77 cents.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Thana

Coincu News

Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.

Recent Posts

Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level

Explore the best new meme coins with 1000X potential. Learn how BTFD Coin leads with…

30 minutes ago

BlockDAG Surges Past $170M as BDAG250 Bonus End Countdown Begins – Aave Targets $400 & Solana Shines with Scalability

BlockDAG crosses $170.5M in presale success with BDAG250 bonus and Whitepaper V3 launch! Solana grows…

2 hours ago

Qubetics Presale Price Surge Approaches: The Best Coins to Invest in Right Now While Toncoin, and XRP Gain Traction

Discover why Qubetics, Toncoin, and XRP are the best coins to invest in right now.…

3 hours ago

Book of Meme Old News? This Best Meme Coin to Invest in 2024 Is Multiplying Gains Like a Champ

Over the years, meme coins have evolved from inside jokes into serious investment opportunities.

4 hours ago

Time’s Ticking on BlockDAG’s 5-Tier Bonus- Few Days Left to Grab It While Cardano Whales Take Action, Aave Rallies Strong

Discover BlockDAG's five-tier bonus program's closing phases that enhance buyer holdings. Gain insights on the…

4 hours ago

Best Altcoins to Buy for 2025: Qubetics Presale Surge, Solana’s Lightning Speed, and Cardano’s Blockchain Revolution

Discover why Qubetics, Solana, and Cardano are redefining the crypto landscape. Learn about milestones, price…

5 hours ago

This website uses cookies.