Crypto Markets Suffer Whiplash From Recent Turmoil

The most dramatic week in technology and banking ended with crypto markets up on Monday. The wider industry is suffering from a serious case of whiplash.

There’s whiplash, and then there’s whiplash. The industry is holding its head, understandably wondering what has just happened. Only a few days ago, the sentiment across the industry was panicky. Caused by the news that Silvergate, then Silicon Valley Bank, and finally Signature Bank were in crisis.

At the time of writing, the Bitcoin price has pumped by 10% on Monday alone, with an 18% surge to over $24,200 over a 24-hour period. Ether and ADA also saw double-digit increases.

Contagion Avoided, for Now

On Sunday, the U.S. government announced a limited package of support. “Depositors will have access to all of their money starting Monday, March 13. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” they said in a statement.

On Monday, Biden said, “Investors in the banks will not be protected. They knowingly took a risk, and when the risk didn’t pay off, the investors lost their money. That’s how capitalism works.”

The sentiment across the industry has been widely positive since the announcement. The comments from the US Government have had a calming effect.

“Actions taken by US authorities this weekend seem to be well received by the market as we are seeing a strong momentum in crypto today, says François Cluzeau, Head of Trading and co-founder of Flowdesk, a Paris-based market-maker and technology provider. “For now, we seem to avoid strong contagion — it looks that the right measures were taken at the right time.”

“Already in the past weeks, liquidity has been impacted, uncertainty has caused a significant drop. Today’s sizable gains on crypto markets have actually benefited from this. In a low-liquidity environment, price swings can be much bigger than in high liquidity periods.”

Cluzeau says that many players in the industry were over-reliant on Silvergate and Signature to move their money aro

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Author: Josh Adams

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