Over the past seven days, Bitcoin has soared by nearly 20%. The majority of gains came in the last 24 hours as of writing. Ethereum’s 7-day price movement is also a net positive of 7%. Meanwhile, stock markets are plummeting, with the Dow Jones and the SNP 500 down almost 5% in the last five days. Why, amidst the financial turmoil, has crypto come not only unscathed but skyrocketing?
Inflation is certainly one factor. The Bureau of Labor Statistics (BLS) released a report stating that inflation in the U.S. slowed down to 0.4% in February, which is in line with economists' expectations and down from January's 0.5%. Following the report, the bitcoin price rose to $25,484, a nine-month high, and continued to climb to $25,984, reflecting an 18% gain over the past 24 hours.
The inflation concerns that were previously worrisome have become less pressing as the government, the Federal Reserve, and investors grapple with the potential systemic effects of multiple bank failures. Traders who were expecting a 50 basis point increase in the fed funds rate at the March meeting have shifted their expectations, with rate cuts projected by mid-summer.
Furthermore, digital assets rose on Monday after US regulators announced the creation of a national bank to protect insured depositors of the recently closed Silicon Valley Bank. President Joe Biden's call for Congress and bank regulators to strengthen financial institution regulations following the collapses of Silicon Valley Bank and Signature Bank may also have contributed to the increase in Bitcoin prices.
Whatever it was, the Bitcoin price rise is the best possible outcome after what can only be described as a catastrophic week for banking and finance last week. Here is all the day's news.
1 - According to CoinDesk, major banks including Santander, HSBC, and Deutsche Bank are still willing to work with crypto firms, although they may restrict certain services. Western Alliance and Bridge Bank are also still opening accounts for crypto firms despite falling share prices. However, banks may place restrictions based on the level of crypto exposure.
Digital Currency Group (DCG), the parent company of CoinDesk, is seeking new banking partners for portfolio companies following the collapse of several banks. DCG has also contacted international banks, including Revolut, UOB, and Bank Leumi. A DCG representative will meet with Senate Banking Committee staff to discuss the fallout from banking failures.
2 - Binance has announced that it will suspend the British pound (GBP) on- and off-ramps for new users from March 13, and for all users from May 22. This follows an announcement from Binance's fiat partner, Paysafe, stating that they will no longer be able to provide GBP deposit and withdrawal services via bank transfers and cards to Binance users after May 22.
However, Binance has assured its users that less than 1% will be affected by this change, and the exchange is working to find an alternative solution. Meanwhile, other fiat currencies' deposit and withdrawal methods as well as buying and selling cryptocurrencies on Binance.com remain unaffected.
3 - Epic Games, the developer of Fortnite, plans to add around 20 more crypto-enabled games to its marketplace by next year, on top of the five already available. However, the games won't be developed or published by Epic itself. The first crypto game in its marketplace, Blankos Block Party, has proven popular, as has Core, a Metaverse platform.
Epic Games is cautious about the reputation of some crypto ventures and will not tolerate any "bad behavior" from gaming projects. The company keeps a close eye on safety, but publishers are responsible for transactions, customer service, and refunds.
4 - Lawmakers from India's ruling party and opposition benches participated in a conference discussing Web3, organized by CoinDCX, Bharat Web3, and Forbes. The conference aimed to discuss India's G-20 presidency and potential opportunities for India in the Web3 sector. Former Law Minister Ravi Shankar Prasad expressed his caution regarding crypto while supporting blockchain.
Abhishek Manu Singhvi, who chairs the parliamentary committee on commerce, highlighted the potential of Web3 in materializing India's dream of becoming a $5 trillion economy. BJP Vice President Baijayant Panda said Indian policymakers would update rules and regulations based on feedback during a fireside chat on leveraging India's G-20 presidency. However, Gaurav Gogoi, an opposition parliamentarian, expressed concern over the government's true position on crypto. India's crypto industry remains heavily stifled by taxes and regulation.