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On Monday, the value of major cryptocurrencies increased in the wake of plans shared by the United States government to protect depositors at Silicon Valley Bank and Signature Bank. Bitcoin’s price climbed above$24,000, representing an increase of 18% over the previous twenty-four hours, while crypto stocks such as Microstrategy and Coinbase generated significant positive momentum as well.
Crypto Stocks Rise As Bitcoin Price Soars
In premarket trading, crypto-related equities were already showing moderate gains alongside the price of Bitcoin (BTC). This comes after the government took steps on Sunday to avert what was building up to be a banking catastrophe in the country. The failure of Silvergate Bank and Silicon Valley Bank, institutions with many ties to the crypto industry, led to a precipitous drop in the price of bitcoin late last week, sending it below $20,000 for the first time in over a week.
Read More: Binance CEO Speculates Coordinated Efforts To Destabilize Crypto; Is Bitcoin Under Attack?
However, as markets opened on Monday, the U.S. stock market witnessed bullish momentum with Dow Jones adding 186 points, the S&P500 gaining by 0.7% and the Nasdaq Composite advancing by 1.3%. Bitcoin and other flagship cryptocurrencies also experienced an upsurge as the global crypto market cap reached $1.08 trillion which represents a 13.47% increase over the previous day.
The same was mimicked in the stock market, especially for crypto-related stocks where Microstrategy recorded a gain of 13%, while mining-focused companies like Marathon Digital and Riot Platforms were up 16% and 14% respectively. Crypto exchange Coinbase’s shares also saw a 10% gain at the time of writing.
Can It Sustain Upcoming Volatility?
Despite the fact that a certain segment of the market is praising this as a victory for Bitcoin over financial institutions — the core ethos of why Bitcoin was first created in 2008 — others in the market are speculating on the viability of this positive momentum.
While the FTX exchange acted as the catalyst for the failure of Silvergate bank, the subsequent shutdown of the other two banks was reported to be deeply entwined with the cryptocurrency industry. Therefore market experts anticipate the introduction of stringent regulations from U.S. regulators for banks that work closely with cryptocurrency businesses. Regardless, such news is expected to have an adverse effect on cryptocurrency prices as well as equities related to the industry.
Also Read: U.S. President Biden Claims Investors Of Affected Banks Will Not Be Bailed Out
The post Bitcoin Price And Crypto Stocks Soar Amidst U.S. Banking Crisis; But For How Long? appeared first on CoinGape.
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