Key ideas:
- Silicon Valley Bank crashes, sending the crypto market into a tailspin before Elon Musk talks hit the media.
- The US Department of Justice is appealing the court decision allowing Binance.US to acquire Voyager Digital.
- Huobi Token (HT) sees a sudden drop in insolvency rumors.
Crypto Market Extends Losing Streak to Five Due to US Banking Troubles
On Friday, the crypto market fell for the fifth session in a row, its second five-day losing streak of 2023 and its longest since July 22.
Fed Fear took a backseat on Friday, with the all-important US Jobs Report sending mixed signals. Non-farm payrolls soared for a second month, while the US unemployment rate rose unexpectedly to 3.6%. Significantly, wages grew at a slower pace, easing pressure on the Federal Reserve.
While the statistics were crypto-friendly, the news from the US banking sector was bearish. On Friday, news reached the wires of US regulators who shut down Silicon Valley Bank, the second Main Street casualty in a week.
The news sent the crypto market to a Friday low of $873.25 billion. However, speculation That Elon Musk was able to acquire the embattled bank to support his aspirations to turn Twitter into a megabank reversed the session's losses, leaving the market capitalization with a modest loss of $1.22 billion.
US Department of Justice Appeals to Binance.US Greenlight to Acquire Voyager Digital
On Thursday, the US Department of Justice. appealed the court decision allowing Binance.US to acquire Voyager Digital. The Justice Department wasted no time in filing the appeal. Prior to the filing, the US Committee on Foreign Investment in the United States (CFIUS) had expressed national security concerns.
An acquisition of Binance.US would allow Voyager Digital clients to recover 51% of the deposits held at Voyager at the time of the bankruptcy filing. A locked offer could leave clients with huge losses.
Traveler sheet (VGX) fell 11.35% on Friday to end the session at $0.3303. VGX was down 1.97% at $0.3238 this morning. On Thursday, VGX fell 28.04%.
Huobi Token (HT) Sees Flash Collapse on Liquidity Crisis Rumors
On Thursday, Huobi Token (HT) fell 32.58% to end the day at $3.2362. However, the intraday losses were much more significant, with a flash crash sending HT to a session low of $1.18822. HT fell 75% before Tron (TRX) founder Justin Sun stepped forward to ease immediate fears of another crypto crash.
justin sun setting a USDC 100 million liquidity pool and attempted to allay the fears of another victim of crypto winter, saying,
โHuobi Global Exchange operation is SECURE, the wallets are SECURE and the backend is SECURE. Recent market fluctuations and leveraged liquidations were caused by few users triggering a cascade of forced liquidations in the spot and HT market.โ
Sun, an adviser to the exchange, aggregate,
"Currently, all work is progressing steadily and there are no unexpected incidents, and these fluctuations are simply the result of market behavior."
Comments supported a partial recovery from Thursday's selloff, with HT rising 23.22% to end the day at $3.9875. However, HT was in the red again this morning, falling 2.11% to $3.9033.
Stablecoin woes return with USDC Losing the Peg
The fallout from the Silicon Valley Bank collapse continued this morning. While the crypto market was in positive territory, USDC It lost its peg to the dollar, falling to a morning low of $0.9045. The decoupling came as investors responded to the news that Circle held $3.3 billion in USDC reserves at Silicon Valley Bank. The SVB news raised concerns about whether the USDC has adequate reserves.
The monthly attestation of January presented that USDC had reserves at Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank, Signature Bank, Silicon Valley Bank, and Silvergate Bank.
Amid heightened uncertainty in the crypto market, Binance CEO CZ sought to reassure investors, saying that Binance has no exposure to SVB.
Main Street Contagion hits the crypto market
coin base and Binance suspended USDC conversions as Main Street hits the crypto market. Coinbase announced on Twitter, saying,
โWe temporarily pause USDC:USD conversions over the weekend while banks are closed. During peak periods, conversions are based on USD transfers from banks that settle during normal banking hours. When the banks open on Monday, we plan to restart the conversions.โ
The responses of the SEC and US lawmakers to the latest US banking crisis will attract the interest of crypto investors.
