The price of Bitcoin (BTC), the world’s largest cryptocurrency, spiked to an intraday high of $21,605 on the Bitstamp exchange amid reports that U.S. officials appear to be ready to protect all deposits at Silicon Valley Bank.
The sudden collapse of the go-to bank for U.S. startups has led to panic in the technology industry, with finger-pointing among executives and investors. Crypto executives argued that centralized banking was to blame, but as a major crypto company revealed that it had billions of dollars trapped in Silicon Valley Bank, the tone shifted.
The USD Coin, a stablecoin, which is supposed to trade at $1, dropped to 87 cents after the cryptocurrency company Circle Internet Financial said that it had $3.3 billion held up in the collapsed Silicon Valley Bank. The decline may trigger a wave of selling among holders and put pressure on banks that serve the crypto industry.
According to a Sunday report by The Washington Post, U.S. authorities are mulling over the possibility of protecting all uninsured deposits at the failed bank. The report cites according to three anonymous sources. This would make it possible to prevent broader contagion in the US financial system.
In Sunday interview, Treasury Secretary Janet Yellen stated that there would be no government bailout for the troubled bank after its tumultuous collapse. Yet, she also maintained that the depositors of the beleaguered institution would not be left to face the music alone.
It remains to be seen how Bitcoin will perform on Monday, which is expected to be a tumultuous day for the U.S. stock market amid the SVB drama.