Morning, Coinheads. Hmm, what shall we write about today? Dog-based meme coins? Oh, I know, a historic bank run in the US and its effect on Bitcoin (pumping right now above $22k), USDC and crypto broadly.

As you well know, especially if you’ve already read Stockhead‘s Rise and Shine, Trader’s Diary and Market Highlights columns this morning, the second largest banking collapse in US history occurred late last week and into the weekend.

While news broke last week that the crypto-friendly Silvergate Bank is on the brink of collapsing, an even bigger US banking bombshell was emerging.

California’s Silicon Valley Bank (SVB) – America’s 18th largest – has been hit with a bank run in which depositors withdrew US$42 billion within a few days, triggering a selloff in US bank stocks more broadly.

It’s the largest banking failure in the United States since the 2008 GFC mess.

So, what has this meant for crypto? Here’s a bit of a roundup to get you up to date…

 

SVB and crypto – what we know so far

(We’re quoting some of Stockhead‘s early-rising, Trader’s Diary-writing Eddy Sunarto for these first few bullets  – thanks Eddy. Also, a nod to blockchain analytics and data firm Delphi Digital here, too.)

• “Silicon Valley Bank (SVB) as the name suggests, was known far and wide as a tech lender sitting pretty on more than US$200bn in assets. Today it’s known as the second biggest bank failure in history.”

• “SVB  was hit by a bank run last week as depositors withdrew a whopping US$42bn within a matter of days, triggering a selloff in other US bank stocks.”

• “Depositors are however insured by the FDIC up to US$250k, while uninsured depositors will receive “advanced dividends” sometime this week. Experts also believe the collapse in unlikely to cause a systemic failure through a domino effect.”

• SVB was forced to halt withdrawals and the FDIC (Federal Deposit Insurance Corporation) took over SVB in receivership.

• Now… how about crypto? Here’s where things get messy for this side of the industry. On Friday, Circle, the issuer of major stablecoin USDC, halted USDC redemptions until Monday as banks aren’t open on weekends. Exchanges Binance and Coinbase paused their feeless USDC stablecoin conversions.

• Circle has about US$3.3bn of its cash reserves tied up with SVB. Circle, according to its January reserves report, holds about US$9.88 billion of cash deposited at regulated banks, in order to help back USDC’s value. And per to Circle’s website on March 10, cash deposits in the reserves amounted to US$11.1 billion.

• The USDC 1:1 $1 peg broke with USDC dumping to as low as 85 cents across major exchanges. Cue panicky investors scrambling around into other stablecoins, such as USDT and DAI, and into major cryptos Bitcoin and Ethereum. 

• Some other top stablecoins backed by USDC, de-pegged as well. DAI, the 4th largest stablecoin, with a US$1.4bn market cap hit a low of 86 cents. Meanwhile, FRAX, the 6th largest stablecoin with a US$1bn market cap hit a low of 88 cents.

• Circle has now assured the market that they will cover any shortfall with company resources and potentially external capital. At the time of writing, USDC is sitting at US$0.989 and rising. Whether 

• Meanwhile, US Treasury Secretary Janet Yellen has said she is working with regulators to stem the SVB fallout. Per Reuters: US authorities are preparing “material action” to shore up SVB deposits, while Bloomberg has reported an FDIC auction of Silicon Valley Bank is underway.

• As Delphi Digital notes, a joint statement by the Treasury, Federal Reserve, and FDIC has been made: “Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

• The Fed has announced it will “make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors”.

• Hold up, news just in… it looks like Signature Bank, one of the last (possibly last) remaining crypto-friendly banks in the US has been shut down by state regulators citing systemic risk. Yikes.

In a statement, New York Department of Financial Services Superintendent Adrianne Harris said the FDIC has taken receivership of the bank.

Right then, after seeing it droop heavily late last week post Silvergate Bank fiasco and into the early stage of the weekend, let’s see how Bitcoin and crypto is travelling right now…

 

Top 10 overview

With the overall crypto market cap at US$1.05 billion, up a currently impressive 7% since this time Friday, here’s the current state of play among top 10 tokens – according to CoinGecko.

Well would you look at that… the crypto market is on a tear right now, ever since US authorities delivered some “hey, hey, hey… calm down everybody, we’re here. We’ll work through this together” soothing language. (But don’t call it a banking bailout, mind.)

Bitcoin (BTC) and Ethereum (ETH) have been strong beneficiaries of a crypto musical chairs act as investors move around their assets into the two leading cryptocurrencies – just in case the whole stablecoin thing completely doesn’t live up to its name.

Meanwhile, as we type this, it looks like USDC is very close to being completely re-pegged. Let’s clock into some quick Crypto Twitter analyst sentiment…

For forex and crypto trader Justin Bennett, now is not the time to be bullish, despite this little pump we’re currently seeing…

But if you want to get purely technical about things from another angle, Rekt Capital notes that BTC could potentially close out the week (in the US where we guess things matter most) above the US$21,770 mark, which would apparently invalidate the bearish action of a “double top” on the charts. That would be quite the turnaround.

 

Uppers and downers: 11–100

Sweeping a market-cap range of about US$8.4 billion to about US$396 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)

DAILY PUMPERS

• Render (RNDR), (market cap: US$428 million) +30%

• Synthetix Network (SNX), (mc: US$848 million) +26%

• Optimism (OP), (mc: US$735 million) +25%

• Maker (MKR), (mc: US$777 million) +22%

• SingularityNET (AGIX), (mc: US$444 million) +21%

• Stacks (STX), (mc: US$972 million) +22%

• ApeCoin (APE), (mc: US$1.63 billion) +18%

• Fantom (FTM), (mc: US$1.08 billion) +17%

• The Graph (GRT), (mc: US$1.16 billion) +15%

• ImmutableX (IMX), (mc: US$803 million) +15%

 

It’s a pumpathon right now in the altcoins, with nary a slumper in the top 100 by market cap as we type. To be honest, though, until we see what happens after Wall Street opens on Monday morning in NYC, it might be prudent to take an extremely cautious line on all this crypto froth right now.

 

Around the blocks

Some pertinence and randomness that stuck with us on our morning moves through the Crypto Twitterverse.

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