It appears that despite the hitting of misfortune by the US banking system in the past week, Bitcoin, however, is hitting a fortune.
Frankly, it has been an insanely busy and chaotic past seven days in the US banking ecosystem and unless you are operating from Mars, you can probably tell this news line.
For the sake of preambles, let us dig into the details.
Within the past week, a few massive U.S. banks made headlines. Signature Bank, a crypto-friendly New York regional bank, was closed by regulators due to systemic risk that could threaten the U.S. banking system.
This closure came just days after Silicon Valley Bank crashed and Silvergate Capital wound down its operations.
Signature, known as one of the largest crypto lenders, was the second casualty from the ongoing banking crisis in the U.S., but regulators said that its customers will be made whole, meaning the government is stepping in to protect the economy from further damage.
For reference, Signature Bank had 40 branches across New York, California, Connecticut, North Carolina, and Nevada.
As of December 31, 2022, the bank had $110.4 billion in total assets and total deposits of $82.6 billion.
Around 30% of the bank’s deposits came from the crypto industry.
Back now to the crypto gist.
The crypto industry needs to watch closely for deposit flights from regional banks over the next week, Tegan Kline, chief business officer and co-founder of Edge & Node, said.
“If it gets worse, the regulators have a tremendous problem on their hands. Many regional banks may have to close.”
In the wake of all the banking chaos, bitcoin and ether, the biggest cryptocurrencies by market cap, had a seven-day increase of about 15% and 8%, respectively, at the time of publication, according to CoinMarketCap data.
The global market cap for all cryptocurrencies also increased 8.3% during the same time period to about $1.1 trillion, slightly down from a weekly high of $1.14 trillion on Tuesday, the data showed.
The overall market turmoil has seemingly created a bullish sentiment in the crypto economy, however, as traders responded positively to the news and the overall market cap rose on the week.
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