Customers of Silicon Valley Bank will now have complete access to their savings, according to the Biden administration. This remarkable decision by federal officials to support billions of dollars in uninsured money comes amid concerns that the bank's failure might trigger even more panic.

In the aftermath of Silicon Valley Bank's abrupt implosion, federal authorities said on Sunday that they were taking the necessary emergency measures to stop contagion at other local and small banks.

The Associated Press reported that the British Government and the Bank of England in the United Kingdom revealed early on Monday that they had helped smooth the sale of Silicon Valley Bank UK to HSBC, the largest bank in Europe. The action guaranteed the security of deposits worth around $8.1 billion. For the course of the weekend, British officials searched for a buyer for the California-based bank's UK business. The second-largest bank failure in history was caused by its demise.

According to sources, the U.S. rescue plan entails drawing from a sizable pool of government insurance funds that are financed by banks rather than using public money.

Customers of Silicon Valley Bank will have complete access to their funds as of Monday, according to the regulators.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," federal officials said in the statement on Sunday. "This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth."

#SVB #SiliconValley #Bank #bankingcrash

Key points

BTC has surged over 8% in the past 24 hours following the news of First Republic Bank’s share slump. 

The price gain was recorded across the board as the top 25 digital assets by market capitalization bounced positively with BTC. 

Technical indicators show that BTC may continue to rally after gradually breaking the correlation from the S&P 500.

In April, Bitcoin (BTC) and Ethereum (ETH) reached new heights, surpassing recent records as bullish investors continue to exert pressure in the aftermath of recent traditional financial institution failures.

BTC has been on a steady upward trajectory following news of further struggles at First Republic Bank, increasing by 8.88% over the past 24 hours and breaking past the $28,500 barrier to trade at $29,839 at the time of writing.

Jake Boyle, a director at crypto brokerage Caleb & Brown, has expressed his opinion on the matter, stating that banking failures have led to a renewed positive outlook in the market. He believes that "the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis."

The price rally was ignited just hours after a Fox Business Reporter broke the news that bankers working with the institution expected it to go into government receivership. A receivership is a corporate restructuring model that allows creditors to recover funds and firms to avoid bankruptcy.

Additionally, other assets within the top 25 have also recorded slight gains, with Solana leading the pack with a 9% increase. The leading altcoin, ETH, gained 7.36% after experiencing a recent price correction that wiped away gains from the Shanghai upgrade. Dogecoin, Polkadot, and Polygon also recorded slight gains.

Bitcoins break away from stocks

Throughout most of 2022, BTC and stock prices appeared to have a strong correlation, with investors abandoning risky assets due to interest rate hikes by the Federal Reserve. However, new data from crypto analytics firm Santiment suggests that the relationship between BTC and the S&P 500 may weaken as investors increasingly view Bitcoin as a safe haven amidst the ongoing troubles in traditional banking.

First Republic Bank first faced difficulties in March, prompting major banking institutions such as JPMorgan to deposit $30 billion into the beleaguered bank. Later that month, US authorities considered creating an emergency lending facility to aid in the restructuring of the bank's balance sheet.

On April 23, the bank reported its Q1 earnings, revealing that deposits had dropped by over $100 billion and that it was exploring "strategic options" to address the situation.

#BTC #bank #bankingcrash #bankcollapse #crypto2023

Source: zycrypto

image Source: pixabay

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Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.