Ask Leo- As Bank Crisis Deepens and Rebounds of USDC How High Could BTC Go?
The crypto industry has been in a difficult environment for several weeks due to force regulatory on the exchanges after the collapse of FTX, these actions have led to the shutdown of many crypto programs and wipe off of many project.
While regulatory bodies battling with many crypto projects, and the FTX contagion is still spreading across the crypto industry this has led to the collapse of several banks in United States and other crypto jurisdictions
Let say the collapse of FTX was what triggered the lately collapse of crypto-friendly banks that went into liquidity crisis, Silvergate for example. The failures of banks now become a hot topic lately that caught attention of US government for the effect cause on cryptocurrency industry and the whole economy.
The shut of the Silvergate bank spread to other banks and crypto projects before the recent Silicon valley bank that have a big significant on the market. I think the collapse of SVB will serve as great lesson to crypto project to avoid using banks as their Fiat-backed Stablecoin.
The Silicon Valley bank on the verge of the closure affects Circle Stablecoin USDC falling from $1 peg last week. USDC stablecoins depeg now caused a ripple effect on the crypto market before it been rescue out by FDIC
This action took by FDIC to bail out SVB and other banks is not uncommon in the US but it is necessary for US Economy. If FDIC doesn't come to take control of SVB the contagion will be bad on other banks in America which likely going to affect the whole banking system, and imagine if banking system is affected that will cause a big problem to the economy of the country. But since FDIC see this and make a good amendment by paying 50% of SVB depositors on Monday, and since then market has seen some gains, bitcoin see 10% gains in just 3 days caused an investor reaction if this will continue to rise.
There are lot of discussion on crypto market rebound, some said if this is a bull trap or set for bull run, but my believe is that Bitcoin at $26,000 will set for bull run we're waiting for.