Cryptocurrencies rally despite the shutdown of crypto-friendly Signature Bank; bitcoin breaks through $24,000

March 15, 2023

By Sharan Kaur Phillora

The cryptocurrency industry has been dealt another blow after Signature Bank, a regional New York-based lender that counted several crypto companies as customers, was closed down by New York state regulators over the weekend. Signature Bank is the third bank in a week to shut down after the twin collapses of Silvergate Capital Corp. and Silicon Valley Bank, which were once considered among the US’s most crypto-friendly financial institutions.

Here’s what we know: 

Signature Bank, which had total assets of about $110.36 billion and total deposits of roughly $88.59 billion as of 31st December, was already under the spotlight since the collapse of FTX. 

Despite Signature Bank having FTX deposits that represented less than 0.1% of its overall deposits, the closure of Silicon Valley Bank caused anxious depositors to withdraw their funds from Signature Bank.

The trio of closures caused the crypto market cap to crumble to $912 billion over the weekend, the lowest since January 2023. But heavy resistance by bulls ensured that top cryptos Bitcoin (BTC) and Ethereum (ETC) helped recover the market to trade above the $1 trillion mark once again as on the front of new entries, SignUp Token was seen making headway into the industry with its new approach.

Ethereum (ETH) was all green as its price posted a 7-day high of $1,629.37 after rising overnight by 7.41% at the back of a disaster of a weekend which saw its price nosedive to a 7-day low of $1,378.53, prompted by investor uncertainty around the US banking sector.

According to data by Coin Metrics, Bitcoin rose more than 15% to $24,382.98 and gave a meaningful break above $25,000. This jump came after U.S. regulators announced  a backstop for all the depositors in failed Silicon Valley Bank and made additional funding available for other banks.

“It is a complex matter in the near term,” said Sylvia Jablonski, CEO, and chief investment officer of Defiance ETFs. “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.”

This news has raised concerns amongst investors and entrepreneurs that regulators attempt to stifle the crypto industry by pressuring banks to cut off their business activities. 

It’s noteworthy that the BTC price is approaching the crucial $25,000 resistance zone, which is currently considered very important. A decisive breakout from these levels may trigger a massive price action which may enable a price rise of more than 40% as predicted by one of the popular analysts, Captain Faibik.

However, the traditional financial markets appear to have begun to settle as the US authorities have assured the safety of the depositor’s funds in the bank. Therefore, a slight pullback in the Bitcoin BTC) price may be expected as the investor’s FUD in the banks may ease a little. Nevertheless, it may certainly not impact the star crypto as the bulls are determined to uplift the price and trigger a significant rally ahead. 

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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