Bitcoin (BTC) saw a significant climb, nearly hitting $25,000 on the Bitstamp exchange earlier today. The flagship cryptocurrency is currently trading at $24,078.
Both Bitcoin and Ether saw a surge of approximately 20% since their lows on Friday.
This sudden rise came after reassuring promises from US authorities that deposits at failed Silicon Valley and Signature banks would be protected, leading many crypto-related companies to rally together with major cryptocurrencies.
The troubled USDC stablecoin also rallied following a boost in lenders’ access to quick cash, which was authorized by the Federal Reserve and Treasury after the government takeovers of Silicon Valley Bank and Signature.
Regulators moved to provide FDIC insurance to Silicon Valley Bank depositors who were uninsured, with some critics calling this a bailout.
However, the Biden administration denies that any taxpayer funds will be used, despite depositors who are also taxpayers indirectly funding the FDIC through levies on their bank deposits.
The collapse of Silicon Valley, Silvergate & Signature banks is expected by traders to result in a significant slowdown of rate hikes by the Fed.
This is reflected in the terminal Fed funds rate, which has dropped from 5.7% on Thursday to 5.1% due to the bets being placed by traders.
According to Bloomberg’s Fed swaps, no more rate hikes are now considered the most likely scenario, with 50 basis points of rate cuts priced in by the end of the year.
As reported by U.Today, crypto mogul Mike Novogratz has repeatedly predicted that cryptocurrencies are unlikely to recover without a Fed pivot.
Arthur Hayes, a well-known cryptocurrency figure, commented on the situation, saying that the bond market is indicating it is back to printing money mode, advising people not to fight the Fed.