Following US Support For The Banking Sector, Bitcoin Jumps The Most In Almost A Month

After steps taken by US authorities to halt the spread of worries about the condition of the country's financial system, bitcoin increased to its highest level since November and stocks of crypto businesses soared.

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By market value, the biggest cryptocurrency increased by as much as 10% to $23,703 as of 10:49 a.m. New York, where. The gain is the largest since markets were upended by the collapse of FTX on November 10. Following the failure of Silicon Valley Bank on Friday, American agencies promised over the weekend to properly secure all depositors' funds, and on Monday morning, the bank's UK branch was acquired to HSBC Holdings Plc for £1.

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In the meantime, New York state regulatory agencies on Sunday liquidated Signature Bank, one of the most well-known US crypto-friendly banks that remained after Silvergate Capital Corp. closed down earlier this month, with access to funds for customers. Some significant cryptocurrency firms, including Circle Internet Finance, Coinbase Global Inc., and Paxos Inc. were exposed as a result of the wave of bank closures that alarmed the market for cryptocurrencies.

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Given that Signature is a significant bank within the cryptocurrency industry, the Federal Reserve's rescue plan "has bolstered confidence in the market and allayed worries about the possible collapse of additional players," according to Rachel Lin, founder of SynFutures, a distributed derivative markets stock exchange.

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Marathon Digital Holdings Inc. increased 15%, MicroStrategy Inc. up 14%, and Coinbase Global Inc. increased 5.7%.

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Smaller cryptos known as altcoins saw bigger increases overall, with Cardano up roughly 6% and Tron up nearly 10%. Bitcoin had been bouncing back from its worst week since November, when investor morale was negatively impacted by a sell-off in stocks, uncertainty in the banking industry, and an intensifying crackdown on cryptocurrencies by US regulators. 

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Since Circle, one of the biggest operators of USDC, said it had $3.3 billion of reserves supporting the token deposited with the bank, the bankruptcy of SVB had a ripple effect on the stablecoin market, which is vital to the cryptocurrency industry. Stablecoins are digital currencies that strive to maintain a 1:1 value with a less erratic asset, such as the US dollar, and are a crucial safe haven for cryptocurrency investors want to hold onto their value without switching to fiat money.

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The news of SVB's closure sent a shock through the fully recommend and caused Circle's USDC to fall considerably below its dollar peg. This is the virtual currency equivalent of a money market account breaking the dollar. Monday morning saw USDC trading at about 99 cents after recovering.