Bitcoin surged roughly 10% in the past 24 hours to tap $22,620 during the Asian session Monday, recovering all weekend losses after last Friday’s collapse of Silicon Valley Bank roiled markets.
Ether, too received a significant boost during the period, growing by just over 8% to tap $1,620. Other cryptos, including Cardano (ADA), BNB and XRP also posted gains of over 8% with the global cryptocurrency market cap rising above the $1 Trillion mark again.
Investors betting on a further market drop were caught flatfooted during the surprise marketwide recovery, with about $222 million in shorts getting liquidated in the past 24 hours, according to Coinglass.
The overnight crypto market recovery comes after the Department of the Treasury, and the Federal Deposit Insurance Corporation (FDIC) issued a joint statement stating that they would take necessary measures to safeguard depositors of SVB.
The statement reads:
“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.”
The two agencies also announced similar action for Signature Bank, a New York-based crypto-affiliated bank that went under after being toppled by customer withdrawals- stating that “all depositors of this institution will be made whole.”
The statement relieved the crypto sector, considering that Billions of dollars worth of crypto belonging to various firms was stranded in the two banks.
Jeremy Allaire, CEO of USDC issuer Circle, applauded the two agencies’ move assuring customers that liquidity operations for USDC will resume when banks open today.
“We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system. 100% of deposits from SVB are secure and will be available at banking open tomorrow,” he said.
Brad Garlinghouse, CEO of Ripple, also noted that “Ripple remains in a strong financial position” despite the firm having some exposure to SVB.
“SVB was a banking partner and held some of our cash balance. Fortunately, we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners,” he said in a March 13 tweet.
At press time, Bitcoin had recoiled to $22,553, with Ether dropping to $1,597 as investors booked some profits. According to popular crypto analyst Michaël van de Poppe, Bitcoin needs to pull back $21,300 before one considers entering an extended position.
“At this point, markets have been seeing a significant push upwards, straight into resistance around $22.6K. Focused on $21.3K for Bitcoin, perhaps $21.6K if we want to have some aggro longs. Needs to hold above it,” he tweeted.