By Zachary Stone
It’s been a rough ride for banking institutions in the last few days as three banks closed down in less than a week. Even though all three banks – Silicon Valley, Signature Bank, and Silvergate – were all crypro-related, somehow it seems their collapse isn’t affecting the crypto market negatively.
The market entered a fresh rally today 13 march with Bitcoin climbing back over $24,000. The initial banking crash that created panic caused the asset to drop below $20k on 10 March, but it climbed t0 $22,000 and now seems to be back in the rally it was preparing to enter before now.
Not only Bitcoin, but the entire crypto market is experiencing this rally with. All the top ten crypto assets – excluding stablecoins – are in the green currently.
Stablecoins Lead the Way
After the de-pegging of USDC that created chaos in the crypto space, you would think crypto users would steer clear of stablecoins, but no. Stablecoins led the rally today, with Tether USDT at the forefront. About $183.85 billion changed hands globally in the last 24 hours, and stablecoins were responsible for a significant portion of the volume.
Indeed, USDT and BUSD sold at premium prices of $1.04 and $1.03 respectively in the early hours of trading. This could have been as a result of USDC holders trying to convert to either USDT or BUSD, which pushed the demand for the two stablecoins. Interestingly, even USDC has bounced back and now trades at $0.99.
Is Arthur Hayes Right?
Co-Founder and former CEO of BitMEX, Arthur Hayes recently predicted that the crypto market was about to experience a rally. It did not make sense at the time, because of the panic that the bank closures had thrown the space into. However, it’s been only hours later and the whole sentiment seems to have changed.
There’s also a hint that the Fed and Treasury may be considering the printing of money to support businesses affected by the collapse of these three banks. If that happens, there may even be a greater demand for crypto as investors fear inflation that may follow as a result of such a decision. The question though is, will the rally be sustained or will it be short-lived for now?