Bitcoin, Ethereum And USDC Rebound as HSBC Takes Over Silicon Valley Bank
The past two weeks have been a painstaking moment in the world of finance. We’ve seen the collapse of not just one but two US banks. The FDIC shut down the Silvergate Capital Corp and Silicon Valley Bank, which saw their stock value drop more than 60% on Wednesday alone. This was expected following the recent high customer withdrawals for a bank that highly depends on customer deposits.
On Sunday, the Hongkong and Shanghai Banking Corporation Limited took the financial markets by storm with a strategic, if not well, curated move to acquire the UK-based Silicon Valley Bank. This comes at a time when SVB was at its knees following a series of ripple effects that saw the branch go under following its collapse on Friday, March 10.
The US Government assured all customers affiliated with the SVB would be able to retrieve their sums of money as of Monday 13. This follows a strict policy, as the US treasury and Federal Reserve explain. In the UK, HSBC made headlines by acquiring SVB UK for just £1. The closure marks the largest US bank failure since 2008 after the Washington Mutual. Ideally, SVB’s collapse could have significant effects and direction for tech start-ups in the UK.
HSBC Group CEO Noel Quinn said, “This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors.”
This past weekend, the cryptocurrency market experienced a crisis after Silicon Valley Bank’s failure led to problems with some of the industry’s core plumbing. Stablecoin prices wildly swung, and gas fees soared as investors scrambled to move money around hours after regulators shut SVB amid a run on the bank. However, this took a drastic turn after various bidding submissions and, eventually, HSBC’s actual buyout of the SVB.
On Friday, there were concerns about the collapse of Silicon Valley Bank, which caused a sharp decline in the value of Bitcoin and Ether. However, within the first 24 hours, both tokens experienced an increase of approximately 4%. The issuer of USD Coin (CRYPTO: USDC), Circle, initially contributed to the spread of risks to the cryptocurrency markets by announcing their exposure to the bank. Nevertheless, Bitcoin exceeded the $24,000 mark on Monday, while Ether climbed above $1,641, a positive sign for the market. Note that on Friday last week, both tokens had fallen below strong resistance levels.
Polygon (CRYPTO: MATIC) also saw an increase of over 6%, while BNB (CRYPTO: BNB) was trading up by more than 3% as of Monday. However, other cryptocurrencies did not experience similar gains, suggesting that traders are unwilling to take risks on lesser-known tokens.
Why did Silicon Valley Bank collapse? What does this mean for cryptocurrencies? Does FTX have a hand in this?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
DNACrypto Team
Cryptocurrency & Blockchain Experts
