Crypto Market Rebounds Strongly After Fed’s Rescue Decision

    The cryptocurrency market is in green after the US government’s decision to rescue Silicon Valley Bank.

    On March 13, the US Federal Reserve (Fed) held a sudden closed-door meeting. The federal government then launched a Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

    According to a source from Washington Post, the US government is considering bailing out uninsured deposits at Silicon Valley Bank, in case there is no unit ready to buy the 16th US largest commercial bank which crashed this week.

    The Treasury Department will also set aside $25 billion from the Exchange Stabilization Fund for the Fed’s program. Even so, the Fed does not expect to use it.

    Bloomberg reported that the FDIC and the Federal Reserve are planning to create a special fund to secure deposits at banks in trouble after the bankruptcy of SVB. The source said regulators are discussing the measure with bank leaders and hope to set up a fund to reassure customers and reduce panic.

    After the above news, green has returned to the financial market and the cryptocurrency field. BTC price rallied to the $22,600 mark, before dropping slightly to the current price.

     BTC/USDT 15m chart (Source: Binance)

    A series of stablecoins such as BUSD, USDC, DAI… are also following the general increase. The stablecoin that is suffering the most, USDC, has also returned to $ 0.99.

    USDC/USDT 1 hour chart (Source: Binance)

    Most Popular

    Related Posts