Bitcoin surged above $24,000 as Biden claims that the US will do “whatever is needed” to help banks in the country. The last weekend has been quite difficult for people and some companies that were wondering what was going to happen to their deposits stored at Silicon Valley Bank and even Signature Bank. During his most recent speech, US President Biden mentioned that the banking system is safe.
Bitcoin Surges Amid Biden’s Speech
According to CoinGecko, one of the largest cryptocurrency price aggregators in the industry, Bitcoin is being traded above $24,000, the highest price for Bitcoin since mid-February. This comes at a moment in which banks in the United States are falling and experiencing a sell-off of their stock.
Bank stocks around the world, especially in the United States and Europe, are experiencing heavy losses as SVB’s fallout creates a contagion effect across the banking industry. Joe Biden, U.S. President, vowed to take “whatever is needed” in order to help the whole banking sector. Nevertheless, the market’s reaction to the speech shows that investors are not sure about what could happen in the future with other banks.
Just to mention, First Republic Bank lost more than 75% of its value. Bancorp registered losses of more than 80% while PacWest Bancorp moved down by close to 50%. While banking stocks are falling, Bitcoin and other cryptocurrencies move higher with strength as the market is trying to give a clear signal to regulators and financial authorities around the world.
It is also worth pointing out that the banks that were the most affected in the United States were Silicon Valley Bank, Silvergate Bank, Signature Bank and First Republic Bank.
In the last 24 hours, bitcoin registered 19.1% gains or 2.1% gains in the last 24 hours. Other virtual currencies have also been traded with gains, including Ethereum (ETH) (15.6%), Cardano (ADA) (15.2%) or Solana (SOL) (17.3%).
Meanwhile, in Europe, the STOXX banking index has also fallen by over 6.5% in the last few hours. Therefore, banking stocks in the European continent are experiencing the largest drop in over two years. Meanwhile, Bitcoin has a market capitalization that has surpassed $466 billion and a price per coin of over $24,100.
What’s Going on in the Banking Industry?
Silicon Valley Bank (SVB) has long been a prominent player in the US tech industry. But recent events have cast a shadow over the bank’s future and sent shockwaves through the financial markets. Concerns about the bank’s stability have caused its stock price to plummet and have triggered worries about a broader financial crisis.
SVB’s stock price action has triggered concerns about the bank’s stability. Investors are worried that the problems at SVB could spread to other banks and create a broader financial crisis. In particular, smaller banks may be vulnerable to contagion, as they may not have the resources to weather a financial crisis.
The situation is further complicated by the fact that many smaller banks have been struggling in recent years due to low interest rates and increased competition from fintech firms. This has led to a wave of consolidation in the banking industry, as smaller banks seek to merge with larger, more stable institutions. The collapse of SVB and the concerns about other banks have only accelerated this trend, as investors seek safety in larger, more established banks.
Therefore, Bitcoin seems to be a natural option for a large number of investors that have followed the developments that took place in the cryptocurrency industry in the last years. With Bitcoin getting closer to $25,000 many investors are wondering whether there will be a new bull market ahead.