The crypto market is witnessing a massive crisis as crypto-friendly banks Silvergate, Silicon Valley Bank and now Signature Bank face bank runs. The “bank run” caused by depositors withdrawing money from the bank is causing stablecoins to fall against the US dollar. Many stablecoins, especially Circle’s USDC, have been depegged, which has a systemic effect on other stablecoins and cryptocurrencies.
Why Bitcoin’s price is rising despite the market crisis
Bitcoin price iIt is trending higher as it is trading at $300 premium on Coin base straight away. Coinbase Premium Index for Bitcoin has hit a 26-month high.
Coinbase Premium is the percentage difference between the Coinbase Pro price (USD pair) and the Binance price (USDT pair). Typically, higher premium values indicate investors in the US are buying Bitcoin on Coinbase.
Bitcoin: Coinbase Premium. Source: CryptoQuant
However, Circle’s USDC stablecoin massive $3.3 billion exposure to Silicon Valley Bank and other stablecoins that rely on USDC has led to a huge imbalance in the Bitcoin price.
As investors move away from USDC, the BTC premium on Coinbase skyrockets as their order books merge with USD and USDC. Bitcoin bounty means huge negative funding on perpetual. Experts believe people think it’s a short squeeze, but data shows otherwise.
Bitcoin price is currently trading at $20,426, up more than 3% in the past 24 hours. The 24-hour low and high for BTC price are $19,628 and $20,792 respectively.
Also Read: Elon Musk Expresses Interest in Buying Troubled Silicon Valley Bank
Why is the price of Ethereum rising?
Ethereum price surges higher as gas costs skyrocket after the crypto market’s ties to banks continue to fade. According to data from Etherscan, average gas costs rose above 300 gwei today against the previous median gas cost of 32-40 gwei.
Uniswap, USD Coin, and 1inch are the top 3 gas guzzlers for Ethereum, indicating investors are converting their USDC coins into Ethereum.
Ethereum Gas Fees
The price of Ethereum is currently trading at USD 1,463, up 5% in the last 24 hours. The 24-hour low and high are at $1,378 and $1,481 respectively.
Also Read: USDC’s Dollar Peg Fumbles, Coinbase Pauses USDC:USD Conversions
Varinder is a technical writer and editor, technology enthusiast and analytical thinker. Fascinated by disruptive technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for quite some time and is currently covering all the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
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