Banking Deposit Guarantee Leads Crypto Recovery

gold-colored Bitcoin

Image Source: Unsplash
 

The cryptoasset market staged a recovery late yesterday after announcements from major US institutions that theoretically underwrite much of the banking system.

Bitcoin last week treaded water in the first half of the week above $22,000 but began to take heavy losses after the failure of first Silvergate, then Silicon Valley Bank emerged, sending the cryptoasset below $19,500 on the eToro platform momentarily on Friday. 

However, it recovered over the weekend on the news that US authorities would fully protect all deposits and has now pushed back, hitting above $23,000 for the first time in nearly two weeks. Ether saw similar late-week volatility, falling below $1,400 on Friday before surging above $1,600 this morning, where it continues to hold now. 
 

$25 billion FDIC backstop pushes up prices

The crypto market surged late on Sunday as the US banking crisis took on a new aspect, with the shuttering of New York bank Signature Bank. 

This was followed by assurances from a joint statement issued by the US Federal Reserve, U.S. treasury, and FDIC that all depositors in Silicon Valley Bank (SVB) and Signature would get their money back. The reaction from crypto markets has been swift with tokens regaining value across the board.

Major stablecoin USD Coin (USDC) - which had lost its dollar peg thanks to major uncertainty around holdings it had with SVB - has almost completely recovered after it said it would use other funds to maintain the peg, but was made whole again by the FDIC announcement.
 

Lido expands staking to Polygon

Lido, one of the largest staking protocols by total value locked (TVL) has announced the launch of wstETH on Polygon. The development gives users access to networks previously held back by a lack of ‘bridging’ and will allow users to stake on projects managed by the Polygon blockchain. 

One of the most long-held criticisms of crypto has been the lack of interoperability of blockchains which created walled garden ecosystems, so technological solutions that overcome this are very encouraging. Lido has around 80% of the liquid staking market making it a hugely powerful player in the space. 

Ethereum is on a major journey in its development, having launched staking last year through The Merge. The Shanghai update is imminent in March which will give users more liquidity options and allow their stETH to be withdrawn as required. 
 

Nissan expands Web3 offering

Carmaker Nissan has filed trademarks for a series of Web3 initiatives, including NFTs and metaverse test driving. Carmakers have turned out to be one of the bigger proponents of web3 technology with firms such as General Motors, Ford, and others already stepping into the space too.

Nissan’s announcement includes quite a wide array of applications, including virtual goods stores and marketplaces for NFTs, virtual clothing and cars, and meterverse advertising and sales functions. 

Web3 is still very much in the experimental phases but it is encouraging to see major companies continue to press ahead with plans and innovations despite the tough market conditions of 2022 which saw NFT prices come down from lofty highs.


More By This Author:

Bitcoin Suffers Sharp Setback
Bitcoin Pulls Back On Rate Hike Jitters
Bitcoin Surges Back Above $24,000

Disclaimer: This article should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments