Bank Stocks Crash As Bitcoin Soars 17% Above $24,000
13 Mars 2023 - 08:00PM
NEWSBTC
The cryptocurrency market is volatile, and this week has been no
exception. Yet, the financial sector has been more volatile
recently, with bank stocks taking a big hit and Bitcoin (BTC)
bouncing 17% above crucial resistance lines. As of March 13,
top bank stocks were down double digits, posting deep losses, while
BTC rose above $24,000. Bank Stocks Crash Interestingly, on March
6, Federal Reserve Chair Jerome Powell warned that while the
central bank supports innovation, citizens must be cautious when
exposed to crypto assets. Powell cited concerns over “fraud” and
“lack of transparency” in the sector. Related Reading: Bitcoin
(BTC) Surges Above $24,000 Amid US Bank Crash Despite Powell’s
comments about the crypto space, bank stocks have been the first
casualties following last week’s collapse of the Silicon Valley
Bank. First Republic Bank, for example, recently announced
that it had strengthened its liquidity position through
diversification. But this move didn’t spare the bank’s stock from
plummeting by 64% overnight. JUST IN 🚨 Bank stocks in pre-market
trade: Western Alliance Bancorporation down 62% First Republic Bank
down 64% PacWest Bancorp down 42% Charles Schwab down 8.52%
pic.twitter.com/0uNPxAq72f — Insider Paper (@TheInsiderPaper) March
13, 2023 Other banks have seen similar losses. Western Alliance
Bancorporation is down 62%, while PacWest Bancorp has posted a 42%
dip in the same period. The contagion didn’t spare Charles Schwab,
which offers financial services. Its stock is down 8.52%.
Meanwhile, Bitcoin has surged 17% in the last trading day, marking
a significant reversal of the multi-day decline trend since SVB and
Silvergate’s collapse. Ethereum (ETH) increased by 15% in the past
24 hours. As of March 13, BTC and ETH are changing hands at $24,160
and $1,670, respectively. USDC Regains Its Peg Meanwhile,
stablecoin USDC has retained its peg after slipping to as low as
$0.88 on March 11. Technically, USDC is pegged to the US dollar,
meaning its value should remain $1. Related Reading: Bitcoin Bulls
Gain Strength, But Is The Fed Really Forced To Pivot? However, a
sell-off of USDC caused its price to fall below the $1 peg after
the issuer, Circle, said it had $3.3 billion of its reserves stuck
in SVB. 1/ Following the confirmation at the end of today that the
wires initiated on Thursday to remove balances were not yet
processed, $3.3 billion of the ~$40 billion of USDC reserves remain
at SVB. — Circle (@circle) March 11, 2023 Major crypto centralized
exchanges proceeded to halt the withdrawal of USDC, which
proliferated concerns about the general stability of the
cryptocurrency market. We are temporarily pausing USDC:USD
conversions over the weekend while banks are closed. During periods
of heightened activity, conversions rely on USD transfers from the
banks that clear during normal banking hours. When banks open on
Monday, we plan to re-commence conversions. — Coinbase (@coinbase)
March 11, 2023 Despite these concerns, Circle has
since released details about the USDC reserve, stating
that it is collateralized by 77% ($32.4B) with short-dated US
Treasury bills. The remaining 23% ($9.7B) is held primarily at BNY
Mellon. Feature Image From Getty Images, Charts From TradingView.
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