The cryptocurrency market is able to breathe this Monday (13) amid the measures of US regulators to calm investors after the bankruptcy of Silicon Valley Bank (SVB), the bank of startups, and the decision of US authorities to close Signature Bank, another institution with several clients in the crypto industry.
European stocks are trading lower this morning despite HSBC’s plans to buy SVB’s UK assets, while US index futures are also trading in negative territory, despite the announcement that SVB clients will be able to access funds from starting today and offering more public funds to other US banks, according to CNBC.
In Brazil, Nubank said it was not affected by the SVB crisis, although it started a new round of layoffs.
The highlight is for fintech Magalu, which is studying the creation of the native token Lucoin in a benefits program, according to Valor Econômico.
Bitcoin (BTC) is up 9% over the past 24 hours to $22,283.42, according to data from Coingecko. In reais, the largest cryptocurrency advances 8.7%, trading at R$ 113,926.28, according to the Bitcoin Portal Index (IPB).
Ethereum (ETH), the second-largest cryptocurrency, is up 8.3% at $1,584.18.
Traders betting on further losses for the cryptocurrency market were caught off guard with sell-offs of $183 million in short positions, according to CoinDesk.
Gains are also driven by the announcement by Binance, the world’s largest crypto exchange, that it will convert $1 billion of the stablecoin Binance USD (BUSD) into BTC, ETH and BNB coin, which has soared 7.6% in the last 24 hours.
Binance’s transaction, which accessed the bottom of the industry, took 5 seconds and cost just $1.29, said the exchange’s CEO Changpeng “CZ” Zhao. in tweet in this Monday.
Other altcoins are also recovering, including XRP (+0.2%), Cardano (+9%), Polygon (+4%), Dogecoin (+4.5%), Solana (+6.9%), Polkadot (+5.6%), Shiba Inu (+3.4%) and Avalanche (+8.9%).
US banking crisis
The decision by regulators to close Signature Bank, a bank that counted several crypto companies among its clients, marks another major setback for digital assets as the sector becomes increasingly isolated from the banking system, according to a Bloomberg report. .
The US Treasury Department said Signature Bank was closed by New York state regulators on Sunday and that customers will have access to deposits on Monday.
The announcement comes on the heels of the collapse of Silvergate Capital and Silicon Valley Bank, all of which are strong players in the cryptocurrency sector.
Signature began to distance itself from digital assets after the FTX crash, but still had $16.5 billion in deposits from clients related to the crypto industry as of March 8.
Coinbase Global, the largest US cryptocurrency exchange, said on Friday that it had a balance of $240 million in the bank. Paxos Global said its exposure in Signature was $250 million.
All Silicon Valley Bank customers will have access to their funds starting today, federal banking and financial regulators said in a joint statement on Sunday.
“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen has approved actions that allow the FDIC to complete its resolution on Silicon Valley Bank in a manner that fully protects all depositors,” the statement said. US Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Martin J. Gruenberg, chairman of the US banking regulator, the FDIC, in a press release.
“Today we are taking decisive action to protect the US economy by strengthening the public’s confidence in our banking system,” the statement reads.
Well-funded tech companies can take advantage of the downturn to buy struggling startups, according to a Financial Times analysis.
About 10,000 small businesses, each with more than $250,000 in deposits — the most insured by the FDIC — operated exclusively with the SVB, according to Y Combinator, an early-stage business investor. According to the FT, these startups may have trouble paying employees and meeting other short-term costs.
Impact on stablecoins
Ahead of US regulators’ announcement, Circle, issuer of stablecoin USDC, said early Sunday that it would “cover any shortfall” caused by freezing $3.3 billion of its funds held at SVB.
On Friday, USDC lost parity and even retreated as low as $0.87 amid investor concerns about the stablecoin’s reserves. Even with US government guarantees, Circle now faces the challenge of finding a new banking partner. USDC is already showing recovery but still trades below $1.
MB (Bitcoin Market), the largest digital asset platform in Latin America, has listed the Tether token (USDT), a US dollar-backed stablecoin. The asset is now available in its ERC-20 version for purchase and sale on the MB platform.
Seen as the “safe dollar” of the market, USDT represents a large volume in Brazil – where it is experiencing an explosion of popularity – and in the world, occupying the first position among digital currencies paired with the dollar.
Other cryptocurrency highlights
Fintech Magalu, the financial arm of Magazine Luiza, is studying creating its own native token to serve as a digital currency in a benefits program aimed at consumers and shopkeepers in the retail ecosystem, as Nubank and rival Mercado Livre did last year, according to Valor Econômico. The most likely name for the cryptocurrency is “Lucoin”, in reference to the retailer’s avatar.
One day after the case of frustrated investments of more than R$ 10 million in cryptoassets of ex-Palmeiras teammates Gustavo Scarpa and Mayke come to light, the players’ lawsuits continue in São Paulo’s Justice, according to the newspaper O Globo. News released about the case indicate that the companies involved and their partners, including striker Willian Bigode (former teammate of the duo from Palmeiras and now a Fluminense player), had their accounts verified and blocked (and later, unblocked) after decisions.
Eurozone traders may be required to accept a digital euro if it is considered legal tender, according to a document that will be presented to finance ministers this Monday and seen by CoinDesk. Giving central bank digital currency (CBDC) the same status as banknotes and coins would mean payments would legally fulfill payment obligations and with mandatory acceptance at full face value, according to the proposal.