The market capitalization of all cryptocurrencies went above $1 trillion on Monday morning as the market turned green following a joint statement issued by the US Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), which suggested that all depositors of Signature Bank and Silicon Valley Bank will receive their money starting today.
Price Analysis of Top Cryptocurrencies
According to data from CoinMarketCap, Bitcoin and Ethereum were trading at $20,300 and Ethereum at $1,465, respectively, on Sunday noon. But the two leading cryptocurrencies posted overnight gains of 8% each. As of this writing, ETH is trading at 22,283, while BTC is changing hands for $1,604.
Further, coins in the top 30 list, including Cardano, Avalanche, Litecoin, Solana, and Polygon, surged by more than 10%.
USDC, the second-largest stablecoin, recovered the losses it suffered over the weekend to regain its dollar peg. The stablecoin recorded a new all-time low after it hit the $0.87 mark on Friday following news that its issuer, Circle, held over $3 billion of the funds backing USDC at Silicon Valley Bank.
The sudden decline in USDC and other so-called stablecoins like USDP and USDD prompted doubts among crypto users about the viability of such coins. Whether those doubts have been quashed after USDC regained its peg remains unclear.
The Banking Crisis
The ongoing banking crisis and contagion started about a week ago when crypto-friendly Silvergate began showing signs of trouble. As a precaution, several crypto-native companies, including Galaxy, Coinbase, Crypto.com, and Gemini, announced they would no longer process transactions via the bank. By Wednesday, the financial institution said it would soon close shop.
On Friday, Nasdaq disclosed it had stopped trading of Silicon Valley Bank’s stock. This bank saw its clients withdraw over $42 billion the previous day, and there were rumors that it was looking for a buyer.
Within a few hours, US regulators closed down Silicon Valley Bank, causing its stock to take a hard hit. Immediately after the news broke, several crypto companies, including Circle, Yuga Labs, Avanche, and Ripple, released statements confirming they had exposure to the bank.
Sunday came, and New York State financial regulators unexpectedly discontinued Signature Bank.