Crypto Market Surges Despite Closure of Major Crypto Bank in the US

Cryptocurrencies experienced a surge in value on Monday, despite the closure of Signature Bank, the last major crypto bank in the United States. Bitcoin rose by more than 15% to $24,382.98, while Ether rose 9% to $1,683.20, according to Coin Metrics. Investors were betting that the Federal Reserve will be less aggressive in raising interest rates now that authorities have stepped in to limit the fallout from the closure of Signature Bank and Silicon Valley Bank.

The Dow Jones Industrial Average and S&P 500 eventually turned lower and ended the day in the red, but the tech-heavy Nasdaq Composite finished on an up note. The closure of Signature Bank added to fears by crypto investors and entrepreneurs that regulators are crushing the industry by pressuring banks to cut off their businesses.

Signature Bank was another famously crypto-friendly institution and the next biggest one next to Silvergate, which announced its impending liquidation last week. The end of the Silvergate-Signature duo leaves crypto with few “on-ramps” that allow fiat money to flow into crypto assets.

The Treasury, Federal Reserve, and FDIC disclosed in a joint statement on Sunday that Signature Bank was closed on the same day in a bid to prevent the spreading banking crisis. “Both banks had little diversification,” said Sylvia Jablonski, CEO and chief investment officer of Defiance ETFs. “With high risk often comes high reward, however, if the balance sheet behind the system crashes – while you have a Fed removing liquidity from the system and hiking rates – crypto startups and venture capitalists may have a long road to recovery.”

“It is a complex matter in the near term,” she added. “News of the Fed creating a backstop helped to bolster equities and crypto overnight, however, as panic sets in we will have to see how today’s market holds up.”

Crypto prices rose on Monday, despite the closure of Signature Bank, which added to fears by crypto investors and entrepreneurs that regulators are crushing the industry by pressuring banks to cut off their businesses. Signature Bank was another famously crypto-friendly institution and the next biggest one next to Silvergate, which announced its impending liquidation last week.

The end of the Silvergate-Signature duo leaves crypto with few “on-ramps” that allow fiat money to flow into crypto assets. They helped solve this problem by creating easy banking services and payment platforms for crypto companies, namely the Silvergate Exchange Network and Signature’s Signet platform.

The closure of Signature Bank will make it more difficult for crypto companies to access banking services and payment platforms, potentially slowing the growth of the industry. However, some analysts believe that the closure of Signature Bank could also spur the development of new banking services and payment platforms that cater to the needs of the crypto industry.

In the long run, the closure of Signature Bank and the continued pressure on the crypto industry by regulators could lead to a more mature and stable crypto market. As the industry evolves and matures, it will need to develop new banking services and payment platforms that can support its growth.

In the meantime, crypto investors and entrepreneurs will need to navigate a rapidly changing market that is subject to high levels of volatility and uncertainty. They will need to remain vigilant and adapt quickly to changing market conditions in order to survive and thrive in the crypto industry.

admin

admin

Leave a Reply