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Five Things to Know in Crypto Today: US Bank Woes in Focus

By:
Bob Mason
Published: Mar 18, 2023, 06:47 GMT+00:00

It was a bullish end to the week for the crypto market. US banking sector troubles drove demand as lawmakers prepare to grill banking regulators.

Crypto news - FX Empire.

In this article:

Key Insights:

  • The crypto market cap surged by $77.35 billion to $1,134 billion as investors reacted to a widening US banking sector crisis.
  • Coinbase looks beyond US borders amidst increasingly anti-crypto sentiment.
  • Congress announces March 29 hearing to deep dive into the collapse of Silicon Valley Bank and Signature Bank.

Crypto Market Decouples from the NASDAQ as Banking Crisis Deepens

On Friday, the total crypto market cap surged by 7.32% (+7.32%) to end the day at $1,134 billion. Demand for bitcoin (BTC) and altcoins surged as investors responded to the latest US banking sector-related news.

Crypto market cap hits 2023 high.
Crypto Market – 180323 – Daily Chart

Investors responded to the news of SV Financial Group (SIVB) filing for bankruptcy protection. While the filing may have come as no surprise, Fed bailouts rising beyond levels seen during the 2008 global financial crisis and 11 banks bailing out First Republic Bank likely alarmed mainstream investors.

The NASDAQ Composite Index fell by 0.74%, with the Dow and S&P 500 seeing losses of 1.19% and 1.10%, respectively.

Cryptos decouple from the NASDAQ
Crypto Market – NASDAQ – 180323 – Hourly Chart

Ethereum Staking Inflows Spike on ETH Return to $1,800

On Friday, ETH staking inflows rose to the highest since March 9. The US banking crisis drove ETH to $1,800 for the first time since August 2022. With the Shapella upgrade set for April 12, the rise in staking inflows reflects sentiment toward the US banking crisis, suggesting a bullish price response to the Shapella upgrade.

According to CryptoQuant, ETH staking inflows increased from 18,208 ETH on Thursday to 22,176 ETH on Friday. Above 20,000 levels should be a bullish signal considering historical staking inflow levels.

ETH staking inflows rise.
ETH Staking Inflows 180323

After the upgrade, stakers can withdraw staked ETH from the Beacon Chain, which went live in December 2020. The upward trend eases fear of high unstaking demand.

This week, Coinbase (COIN) warned of lengthy withdrawal times due to increase demand from stakers, saying,

“We anticipate that demand for unstaking will be high soon after the upgrade, and it may take the protocol weeks to months to process unstaking requests.”

Coinbase Announces Expansion Plans Beyond US Borders

On Friday, news hit the wires of Coinbase (COIN) targeting overseas jurisdictions. Increased regulatory and lawmaker scrutiny has forced platforms to look beyond US borders to avoid missing out on the rising interest in the digital asset space.

According to a Bloomberg report, the crypto exchange is in discussions to identify alternative locations in response to the deteriorating regulatory and banking climate for crypto companies.

Listed on the NASDAQ, Coinbase shares rallied by 10.62% on Friday to end the day at $74.98. The surge in demand for cryptos and the plans to establish an ex-US global trading platform delivered the breakout session.

Coinbase finds investor interest.
Coinbase Share Price – 180323 – Daily Chart

Dubai Partners with South Korea to Support Web3 and the Metaverse

Dubai announced a new partnership with South Korean entities in blockchain and metaverse-related industries.

According to the announcement, the DMCC signed two Memorandums of Understanding (MoUs) with South Korean entities to support Dubai’s goal to expand its position as a hub for Web3 businesses. As part of the MoU, the DMC will assist South Korean Web3 companies set up at the DMCC Crypto Centre and its new Gaming Centre.

The crypto winter has adversely affected growth in Web3 and the Metaverse. However, the sandbox (SAND) is up 77.8% year-to-date, outperforming BTC (+65.1%) and the broader crypto market (+50.0%). This morning, SAND was up 4.83%, following a 13.53% gain on Friday.

SAND makes strong moves in 2023.
SANDUSD – 180323 – Daily Chart

Congress Schedules Hearing on SVB and Signature Bank Shutdowns

On Friday, Chairman of the House Financial Services Committee Patrick McHenry announced the first hearing on Silicon Valley Bank and Signature Bank failures.

According to the announcement,

“Patrick McHenry and Ranking Member of the House Financial Services Committee, Maxine Walters, announced a bipartisan hearing with federal financial regulators in response to the failures of Silicon Value Bank (SVB) and Signature Bank to be held on March 29, 2023.”

Martin Gruenberg, Chairman, Board of Directors of the Federal Deposit Insurance Corporation (FDIC), and Michael Barr, Vice Chair of Supervision, Board of Governors of the Federal Reserve, are witnesses.

In a statement, McHenry said,

“We are working around the clock to deliver answers to the American people to protect depositors, promote the safety and soundness of America’s banks, and strengthen our financial system. We will conduct this hearing without fear or favor to get the answers the American people deserve.”

The hearing will undoubtedly garner plenty of interest. Crypto market players have faced heightened scrutiny since the collapse of FTX.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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