Bitcoin, Ether extend gains as US regulators take responsibility for banking industry turmoil
Bitcoin and Ether rose the most in the 10 non-stablecoin cryptocurrencies by market capitalization on Tuesday afternoon in Asia. Cryptocurrencies have been on the rise since US regulators took responsibility for the failures of the banking industry and moved to protect deposits across crypto-linked banks. The asset class is also benefiting from market talk that unrest in the banking industry could cause the US central bank to halt interest rate increases.
Bitcoin, the world’s largest cryptocurrency, rose 8.2% to $24,404 in the 24 hours to 4:00pm in Hong Kong, bringing its weekly gains to 8.8%, according to CoinMarketCap data. Ethereum rose 3.93% to $1,677, after gaining 6.72% on the week.
Dogecoin rallied 2.31% to $0.07242, but lost 3.54% in the past seven days. Polygon’s Matic token rose 2.04% to $1.16, after gaining 0.83% on the week.
USD Coin (USDC), the second largest stablecoin by market cap, rose 0.75% to $0.999, but fell 0.09% on the week. USDC had momentarily lost its peg to the US dollar after the closure of Silicon Valley Bank (SVB), but recovered after Circle, the issuer, announced a new partnership with Cross River Bank.
“We expect that the stress in the banking sector, and the wider impact on confidence, will now give the central bank [U.S. Federal Reserve] reason to pause the rate hike programme, says Nigel Green, managing director of financial advisory firm deVere Group.
The global crypto market capitalization increased by 4.39% to $1.07 trillion, while the total crypto market volume rose 16.93% to $90.47 billion in the last 24 hours.
All Asian stock markets fell on Tuesday as investors braced for the biggest US bank failure since 2008. Hong Kong’s Hang Seng index fell 2.27%, while South Korea’s Kospi fell 2.56% and Japan’s Nikkei 225 fell 2.19%.
The Shanghai Composite lost 0.72% while the Shenzhen Component Index fell 0.77%, despite China announcing it will resume issuing visas from March 15 as it eased its zero-Covid policy. Investors are also looking ahead to a series of China economic indicators expected to be published on Wednesday.
Investors are also awaiting US inflation data later on Tuesday. The February consumer price index (CPI), a key inflation indicator, is expected to be 6% on the year, down from 6.4% for the year ending January 2023, but still well above the US Federal Reserve’s 2% target.
“Despite most warning signs flashing red, the US has continued to defy gravity,” said Keith Wade, chief economist and strategist at Schroders. “We still believe that higher interest rates, which we now expect to peak at 5.25% in the second quarter of 2023, will lead to a recession. However, it is likely to be relatively short and shallow.”
Discard the NFT 500 index rose 0.7% to 4,064.39. Planet IX – Gravity Grade rose 51.67% as the biggest gainer of the day, followed by EGoldMiner which gained 44.63%.
European shares traded slightly higher after a two-day selloff. The STOXX 600 rose 0.1% and Germany’s DAX 40 rose 0.53%, while Britain’s FTSE 100 fell 0.32% to a two-month low, as investors weighed spillovers from the collapse of SVB and Signature Bank.
HSBC shares fell 1.28% on the day, following news that the bank would inject £2bn ($2.4bn) of liquidity into the UK unit of SVB.
See related article: Crypto banking crisis?