Bitcoin (BTC) seems to be recovering following a steep drop in value brought on by investor hysteria as a result of problems at Silicon Valley Bank and Silvergate. A recent announcement by U.S. officials that they would assist clients in recovering stolen monies might have favoured the price of Bitcoin.
According to the latest figures, its value has spiked over 7% in the last day and a half. The price of one Bitcoin was $24,070 as of the time of writing. BTC’s trading volume had also seen a whopping 77% increase within the same period taking it to $37,954,477,018.
How might watchdogs have affected the price?
Treasury Secretary Janet L. Yellen, Chairman of the Federal Reserve Board Jerome H. Powell, and Chairman of the Federal Deposit Insurance Corporation Martin J. Gruenberg issued an official statement on the topic of Silicon Valley Bank and Silvergate to protect the economy of the United States by bolstering public trust in the banking system. This new development by the regulators has restored investor confidence in crypto.
Yellen thinks that the appropriate actions need to be taken by the relevant regulatory bodies for the banking sector to continue safeguarding deposits and providing access to credit for individuals and businesses in a manner that fosters strong and sustainable economic growth.
After consulting with the President and taking advice from the boards of directors of the FDIC and the Federal Reserve, Secretary Yellen gave the green light for actions to be taken that will make it possible for the FDIC to complete its resolution of the Silicon Valley Bank in Santa Clara, California, in a way that will guarantee the complete safety of all depositors. Beginning on March 13, all depositors will have access to their funds. The settlement with Silicon Valley Bank will not result in any loss of cash to the government.
It was additionally announced today that Signature Bank, also based in New York, will be closed after the state chartering board granted a similar systemic risk exemption. All depositors will be fully compensated, and the government will have no liability, much as the Silicon Valley Bank settlement.
Circle introduces automated minting for USDC amid watchdogs’ latest move
With the help of new financial partners, Circle, a prominent producer of digital dollar stablecoins, has announced automatic minting and redemption of USDC for its users. Circle is taking this step to safeguard the foundation of its internet-based money and payment systems from the dangers associated with fractional reserve banking. Despite bank contagion impacting crypto markets, Circle CEO Jeremy Allaire has emphasized that the business would continue to ensure the trustworthiness, security, and 1:1 redeemability of every USDC in circulation.
Most of the USDC reserve ($32.4B) is kept in BNY Mellon as cash, while short-term U.S. Treasury Bills collateralize the remaining cash. BNY Mellon is responsible for safekeeping the reserves, while BlackRock oversees the assets’ liquidity and administration. Circle publishes monthly USDC attestation reports on its website to be transparent with its investors.