Cryptocurrency Market Went on a Wild Ride This Week | ETF Trends

Cryptocurrency traders who thrive on market volatility have been on a wild roller coaster ride for the past week. More risk-averse investors may be apprehensive, but it's all part of the volatile market that is at least ending well for bulls so far.

Bitcoin, the leading cryptocurrency, has breached the $24,000 mark after dipping below $20,000 recently. Bitcoin and the rest of the cryptocurrency markets have been following traditional assets for most of the year (and last year), while inflation fears and rising interest rates have once again been the main drivers. in the movement of all markets.

More recently, the collapse of the SVB Financial Group has thrown a lot of volatility in the financial markets, which is spilling over into the crypto markets. The fallout from the SVB debacle also sent shares of regional banks tumbling, including San Francisco-based First Republic, which saw its share price plunge 60% on Monday, March 13.

That affected other bank stocks, causing multiple disruptions in share trading, according to a Reuters report. These latest developments follow crypto lender Silvergate Capital announcing that would shut down operations, while Signature, another crypto-friendly bank, was attorney by banking regulators.

The US government saves the day

Due to the threat of a possible banking crisis, US President Joe Biden he addressed the situation and promised to do what was necessary to prevent a crisis from occurring. This, in effect, injected much-needed euphoria to investors, which spilled over into the cryptocurrency markets.

The aforementioned Reuters report noted that national regulators implemented emergency measures, while First Republic assured additional financingthanks to help from JPMorgan and the US Federal Reserve. The latest drop in bank stocks follows the Federal Reserve's aggressive tightening of monetary policy as it tries to rein in inflation.

In essence, rising rates can hurt the bottom line of regional banks, especially if several of their products rely on loans, which consumers won't demand if rates are too high. According to Art Hogan, chief market strategist at B. Riley Wealth, the market is “figuring out in real time what the risk of rising interest rates at such a fast pace can do to the balance sheets of some of the regional banks.” .

“Given the Fed's announcement over the weekend of support for banks and specifically for Silicon Valley Bank, markets have been elated knowing that depositors' money is safe and a potential big run on the bank has been averted. said Vijay Ayyar, vice president of corporate development. and international in crypto exchange Luno, in a CNBC report.

For more news, information and analysis, visit the crypto channel.

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