Salem Radio Network News Tuesday, March 28, 2023


Bitcoin, USDC stablecoin rally after US intervenes on SVB

SINGAPORE (Reuters) -Bitcoin and other cryptocurrencies rallied on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and as cryptocurrency firm Circle assured investors its peg was secure.

The U.S. Treasury and Federal Reserve announced a range of measures to stabilise the banking system and said depositors at SVB would have access to their deposits on Monday.

The moves came as authorities took possession of New York-based Signature Bank, the second bank failure in a matter of days.

Stablecoin USD Coin (USDC), which had lost its 1:1 dollar peg and hit an all-time low on Saturday on concerns over the exposures of Circle, the firm behind USDC, to Silicon Valley Bank, recovered. It was at $0.9917, closer to par and up from last week’s lows around $0.88.

Circle CEO Jeremy Allaire said in a tweet its $3.3 billion USDC reserve deposit held at the collapsed Silicon Valley Bank will be fully available when U.S. banks open Monday.

“Circle’s USDC operations will open for business, including with new automated settlement via our new partnership with Cross River Bank,” Allaire said.

Bitcoin was up about 8% from Sunday’s lows at $22,466.

U.S. officials said depositors of New York’s Signature Bank, which was closed on Sunday by the New York state financial regulator, would also be made whole at no loss to the taxpayer. 

Signature, like SVB, had a clientele concentrated in the tech sector, and the securities on its balance sheet had eroded as interest rates rose. As of September, almost a quarter of Signature’s deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion.

Most analysts, however, cautioned against assuming all is well with market sentiment after these measures.

“Markets remain unsettled from the SVB failure,” said Alvin Tan, head of FX strategy at RBC Capital Markets in Singapore.

“The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The situation is evolving, but volatility looks set to remain elevated in coming days.”

(Editing by Kim Coghill and Jacqueline Wong)


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