This week, digital assets have changed their course compared to the recent downward trend. This was due to comments by representatives of the Federal Reserve System, which dispelled concerns about the impact of the Silicon Valley Bank bankruptcy on the banking sector and the economy.
Since Monday, March 13, the growth of BTC and ETH has reached double digits. Recall that last Friday the announcement of the bankruptcy of Silicon Valley, one of the largest banks, was a shock to the financial market. A wave of resonance in the markets led to the fall of BTC below $ 20 thousand.
However, already on Monday, the statement of the US Treasury Department, the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) on providing investors with full access to deposits led to a rapid growth of the market. Representatives of the US Federal Reserve also promised depositors to provide additional financing to all deposit institutions as a solution to liquidity problems.
This statement was important, as investors gained confidence in the return of deposits in the amount of $ 250 thousand. Circle, the USDC issuer, which kept part of its funds in SVB, also announced liquidity support with its reserves. At the same time, a record daily movement in the value of crypto assets has been recorded since November 2022.
Meanwhile, against the background of the latest news, bond yields fell. Before the collapse of Silicon Valley Bank, the probability of an interest rate increase by 50 basis points was estimated at 40%, but after the events that have occurred, the probability is growing that rates will remain unchanged.