14th March 2023 – (New York) Bitcoin’s price surged over 10% in the past 24 hours, rising above US$24,000 for the first time in two weeks. This was attributed to US regulators backing deposits at Silicon Valley Bank (SVB) and Signature Bank (SBNY), as well as hopes that the banking sector’s near meltdown would prompt the Federal Reserve to scale back its monetary hawkishness. Martin Leinweber, digital assets product specialist at MarketVector Indexes, noted that the Fed bailout for depositors had eased concerns about contagion risk and triggered a short squeeze. The surge caught traders who bet on a price fall off guard, forcing them to liquidate around $81 million of BTC short positions.
Joe DiPasquale, CEO of crypto asset manager BitBull Capital, said that an outflow from Circle’s USDC stablecoin to bitcoin and Binance’s decision to exchange stablecoins from its recovery fund to bitcoin and ether also contributed to the price increases. Binance had announced its decision to convert $1 billion worth of Binance USD (BUSD) to bitcoin (BTC), ether (ETH), BNB coin (BNB), and other tokens to support the market. However, despite the temporary bailout relief, sentiment remains apprehensive and cautious, according to Leinweber. He sees concerns raised over possible further banking fallouts and businesses that are industry-critical due to the inability to efficiently manage cash flow. Joshua Frank, co-founder and CEO of The Tie, a provider of information services for digital assets, struck a cautiously optimistic note, saying that while the loss of Silvergate, SVB, and Signature is devastating for US-based crypto companies, the narrative of Bitcoin as a hedge and safe haven has gained steam.