Archive for the ‘Bitcoin’ Category

Bitcoin rallies over 18% in 24-hour span in wake of SVB crisis – TechCrunch

Image Credits: Yuichiro Chino / Getty Images

The value of major cryptocurrencies rose Monday in the wake of U.S. government plans to protect Silicon Valley Bank and Signature Bank depositors.

The Federal Reserve issued a pair of statements on Sunday with one clear message: Silicon Valley Banks depositors, both insured and uninsured, will receive help in a manner that will fully protect their deposits.

The risk of a banking contagion was lower at the start of the week than last Friday, but not zero.

Following a rally in the price of bitcoin and other crypto assets, the overall crypto market surpassed $1 trillion in value on Monday, up about 14% day over day.

In the past 24 hours, bitcoin rose 18.4% to over $24,000, while ether rose 15% to about $1,700, CoinMarketCap data showed. The two cryptocurrencies, which are the largest by market capitalization, are trading in parallel with one another.

USDC, the second largest stablecoin, also recovered about 4% in the past 24 hours following the news that deposits would be protected, CoinMarketCap data showed.

The alleged stablecoin depegged from its $1 peg for three days, going as low as 88 cents, after uncertainty circulated around the $40 billion USDC empire and the company shared that $3.3 billion, or about 8.2%, of its total supply of reserves were held in SVB.

Circle announced the reserve risk was removed since the funds became available on Monday morning.

Trust, safety and 1:1 redeemability of all USDC in circulation is of paramount importance to Circle, even in the face of bank contagion affecting crypto markets, Jeremy Allaire, co-founder and CEO of Circle, said in a statement. We are heartened to see the U.S. government and financial regulators take crucial steps to mitigate risks extending from the banking system.

USDCs market capitalization is about $40.5 billion, with $10.9 billion in daily traded volume, down 1% in the past 24 hours, according to CoinMarketCap data. At the time of publication, USDC was millicents away from its $1 peg at $0.993, up 3.9% in the past 24 hours.

The crypto market, alongside other major industries, had a volatile week after Silvergate Capital, one of the largest banks to provide services to crypto companies, shared it was winding down operations and liquidating its banking division.

Shortly after, Silicon Valley Bank collapsed on Friday, and Signature Bank, a major crypto lender, was shut down by regulators on Sunday.

This market turmoil has seemingly propped up the crypto market, however, as traders responded positively to the news and the overall market cap rose on Monday.

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Bitcoin rallies over 18% in 24-hour span in wake of SVB crisis - TechCrunch

Evaluating Bitcoin as a Store of Value – Yahoo Finance

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Its a common question: Is bitcoin (BTC) a store of value? While proponents say, Yes without hesitation, skeptics note its historically large drawdowns. And thats fair. Not long ago, in November 2021, bitcoin reached nearly $70,000 but is now around $20,000. That said, BTC also used to trade below 1 cent so, using just prices, the answer to the initial question is, Its hard to tell.

For an asset in its speculative, price-discovery phase, volatility should be expected. New opportunities and technologies often capture the attention of speculators and traders, often resulting in wild fluctuations as participants seek to determine true value.

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Pair growing interest with the skepticism, controversy and industry speed bumps experienced thus far, and the roller coaster of highs and lows makes sense at just 14 years of age.

While the asset exhibits qualities of sound money (its durable, portable, scarce, uniform and divisible), acceptance is the final uncertainty.

Through the following on-chain metrics, I aim to prove that bitcoins users believe its a store of value (SoV), despite the volatility.

Realized capitalization

One measure of bitcoins use as an SoV is its realized capitalization. Different from traditional market cap, this alternative considers the last transfer price of each bitcoin rather than the current market price.

In doing so, realized capitalization is an aggregate cost basis of bitcoins on-chain users. The total realized cap is the amount of money that has been stored in the network over time.

To me, this is a proxy for inflows. Realized capitalization rises when transfers are made at higher prices than before and declines when transfers are made at lower prices.

Story continues

According to Glassnode data, bitcoin stores a total of about $380 billion in value, down from a peak of $460 billion. But, importantly, this is four times more than in December 2017 when bitcoin was priced around where it is today. So, money has flowed into the network to store value.

(Joe Orsini, Glassnode)

Holding trends

Not only that, but bitcoins users also are holding the asset for longer and longer. Just last week, the percentage of supply that has been held for long periods has hit all-time highs despite the drop in prices since late 2021. As of March 7, according to Glassnode data:

% Supply Held for 1+ Years: 67.7%

% Supply Held for 2+ Years: 51.4%

% Supply Held for 3+ Years: 39.2%

% Supply Held for 5+ Years: 28.3%

(Joe Orsini, Glassnode)

Conclusion

There is a saying that perception is reality. Remember, bitcoin has essentially been willed into existence. Despite the noise and skepticism, money continues to flow into the network and its users are holding their assets for longer periods of time.

The next time somebody questions bitcoins use as a store of value, show them these charts. As Satoshi Nakamoto wrote, If enough people think the same way, that becomes a self-fulfilling prophecy.

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Evaluating Bitcoin as a Store of Value - Yahoo Finance

First Mover Asia: Bitcoin Plunges to Mid-January Levels – CoinDesk

Bitcoin's Return to January Days

Bitcoin returned to January levels on Thursday, plunging below $20,000.

The largest cryptocurrency by market capitalization was recently trading at $20,067, down 7.7% over the past 24 hours as nervous investors stewed over ongoing inflationary pressure, fallout from the implosion of crypto-friendly Silvergate Bank and, most recently, a New York state lawsuit that alleges ether and other cryptos are securities. BTC has now erased about half its gains from a vibrant first six weeks of the year when hopeful investors sent the crypto up about 40% and past $25,000 in mid-February.

"There's a lot of people that are scared that maybe the domino effect is just starting," Eddy Gifford, a wealth adviser for investment adviser Tactive. "There's FTX, now Silvergate, who's next? We also had news out of the Fed where [Federal Reserve Chair Jerome] Powell was very hawkish on raising interest rates likely higher than anyone wanted to even expect and potentially keeping those rates higher for longer. In those situations, risk assets in general tend to decline, because valuations are a function of the ability to meet estimates and interest rate environment."

He added: "So if the interest rate environment remains elevated for longer, that's going to push prices down."

Ether roughly matched bitcoin's plunge to change hands at about $1,430, its lowest level since mid-January. Other major cryptocurrencies were firmly in the red with CRO, the token of exchange Crypto.com, off 7.6% and popular meme coins DOGE and SHIB both dropping more than 8%. The CoinDesk Market Index, a measure of the broader crypto market's performance, was down 7.5%.

The sour mood in crypto markets also manifested itself in crypto traders' some $307 million in liquidations over the past 24 hours, according to Coinglass data. Bitcoin (BTC) traders suffered the heaviest losses, some $112 million, while ether (ETH) liquidations surpassed $73 million. Of the liquidated trading positions, some $282 million were longs, betting on higher prices.

Meanwhile, equity markets stumbled amid a massive sell-off of bank stocks that sent JPMorgan Chase and Bank of America down more than 5% and 6%, respectively. The tech-focused Nasdaq tumbled 2.1%, while the S&P 500 and Dow Jones Industrial Average (DJIA) fell 1.8% and 1.7%, respectively. The downturn came even as jobless claims ticked up slightly, a mildly encouraging sign given the tight job market that has pressured prices upward.

Tactive's Gifford said that if bitcoin breaks with $20,000, "we could get to $15,000 pretty fast," and if we break through $15,000 we go to $10,000 fast. But he noted bitcoin's staying power and halving next year. "That typically has been a spark for bull markets in bitcoin," he said.

He added: "We'll see a few more companies fall, but that's just going to make the ones that are left on the back end that much stronger. And I think that builds a case for we start actually seeing some more widespread adoption of digital assets in general."

Futures Contract Holders Remain Unbowed

The average funding rate for perpetual futures contracts in both bitcoin and ether remains positive, despite recent concerns of turmoil in markets. Funding rates are set by exchanges and regulate the price of futures contracts relative to the market value of the asset.

Positive funding rates indicate bullish sentiment, as holders of long positions are paying shorts. The opposite is the case when funding rates are negative.

Funding rates for BTC have been positive since Feb. 13, with the exception of a negative dip on March 5.

Crypto-friendly Silvergate Bank will "voluntarily liquidate" its assets and wind down operations, its holding company, Silvergate Capital Corp., said Wednesday. Bianco Research, LLC President and macro strategist Jim Bianco and Opimas, LLC CEO and founder Octavio Marenzi weighed in on the latest developments. Plus, "Crypto Critics' Corner" co-host Bennett Tomlin discussed the recent Wall Street Journal report that the company behind the world's largest stablecoin accessed bank accounts by way of falsified documents and intermediaries.

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First Mover Asia: Bitcoin Plunges to Mid-January Levels - CoinDesk

Forget Bitcoin: BlackRock CEO Touts Next Big Thing in Crypto – U.Today

Alex Dovbnya

BlackRock CEO Larry Fink has suggested that the next big trend in the crypto industry could be tokenization

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BlackRockCEO Larry Fink's annual letter to investors suggests that tokenization might be the next big trend in crypto.

According to the head of the $10 trillion asset management behemoth, Bitcoin has caught headlines as a mere distraction, with the media's "obsession" obscuring other interesting developments happening in the cryptocurrencyspace.

Fink draws attention to the dramatic advances in digital payments taking place in emerging markets such asBraziland parts of Africa. Hecontrasts them with the sluggish pace of innovation in developed markets like the US, where the cost of payments remains high.

In his view, the fragmentation of asset categories into tokens presents a highly encouraging prospect.

He has confirmedthat Blackrock is actively delving into the realm of digital assets with an emphasis on permissionedblockchains and the conversion of stocks and bonds into tokens.

However, Fink acknowledges that while the industry is maturing, there is still no regulatory clarity.He hasassuredinvestors that they will apply the same standards and controls to cryptothat they do across their business.

As reported by U.Today,Fink predicted that most cryptocurrency companies would failduring his recent appearance at a summit. The BlackRock bossalso revealed that BlackRock put $24 million into the defunctFTX exchange, but it was then forced to mark thatsum down to zero.

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Forget Bitcoin: BlackRock CEO Touts Next Big Thing in Crypto - U.Today

Bitcoin a Risk to Profits Says Bank – Trustnodes

Use of emerging alternative payment platforms, such as Apple Pay or Bitcoin or other cryptocurrencies, can alter consumer credit card behavior and consequently impact our interchange fee income.

So says Horizon Bancorp which provides a broad range of banking services through its bank subsidiary, Horizon Bank.

They have $7.9 billion in assets and $5.9 billion in deposits with this regional bank being the first to explicitly state that bitcoin is a risk to their profits.

The increasing use of Bitcoin and other crypto currencies and/or stable coin and the possible impact these alternative currencies may have on deposit disintermediation and income derived from payment systems, is one of the risks, uncertainties, and factors that could cause Horizons actual results to vary materially, the bank says, as well as:

Potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms (e.g., Apple Pay or Bitcoin) take a greater market share of the payment systems.

Of course the banks loss is the publics gain as they benefit from lower fees or from diversifying deposit risks, but allegedly some regulators are intervening against this market competition and innovation which benefits the taxpayer.

Barney Frank, the former congressman and architect of the landmark Dodd-Frank banking regulations who also sits on the board of Signature bank, which was closed last week by the Department of Financial Services in New York (DFS), accuses the latter of closing the bank for no good reason as it was not insolvent, but to send a crypto message.

Why did they react so harshly to what they said was our inability to give them the sufficient data? I believe it was probably to send the message that even though we were doing crypto stuff responsibly, they dont want banks doing crypto.

DFS has denied the accusation, claiming there was a crisis of confidence in the banks leadership, but if the bank was indeed solvent, closing in does raise questions.

In addition the admission by Horizon bank now finally provides evidence of bias, which law makers and the elected will hopefully bear in mind when they are lobbied, both through the media and in private, against what they see as their competitor: crypto.

Where bankers as individuals are concerned however the story has been changing and considerably, with many of them embracing the new frontier.

Yet some bankers, like Jamie Dimon or Warren Buffet, remain viciously biased towards the entire crypto space with some regulators too often not bothering to hide their bias.

A bias no different than Blockbusters towards Netflix, with here too lower fees, diversification of risk and other features, including ease of global access, benefiting the public.

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Bitcoin a Risk to Profits Says Bank - Trustnodes