© Reuters By Geoffrey Smith
Investing.com – Bitcoin hit a nine-month high and cryptocurrencies rose across the board on Tuesday as concerns about reserves held by digital platforms in troubled US banks faded.
Prices were also supported by signs that Binance was pursuing its stated intention to convert its $970 billion “Industry Recovery Fund” into digital assets, a significant shift in real demand for digital assets at a time when market liquidity has dried up badly. Make mega moves easier.
By 11:00 ET (15:00 GMT), it was up 16% at $26,084, while it was up 7.2% at $1,762.50.
In the world of stablecoins, it reclaimed its currency’s peg to the dollar after uncertainty about the fate of its reserves held on deposit to a Silicon Valley bank dissipated. The Federal Reserve, which acquired SVB late last week after a depositor run, said it would underwrite all deposits both at SVB and at Signature, another crypto-friendly bank, in order to stop contagion spreading among traditional banks.
“DeFi has survived its biggest existential crisis to date thanks to a timely bailout by the Federal Reserve that was not something any of us expected,” Canada-based academic John Paul Koning said via Twitter.
However, at the same time, signs of restrictions on the crypto ecosystem have continued to multiply, as regulators around the world have moved to restrict the interaction between traditional and digital finance. Binance, the world’s largest cryptocurrency exchange, was forced to suspend sterling payments to and from its network on Tuesday after payments firm Safepay said it had stopped supporting sterling-based transfers. Binance, which does not have a license to operate in the UK, has been warned in the past by the Financial Conduct Authority not to market its services there.
This came a day after Coinbase (NASDAQ:) announced that it would cease trading in a local token listed on Binance, after US regulators ordered its sponsor, Paxos, to stop minting what it claims are unregistered securities.
In the US, the closure of the Signature-run SigNet payments network was particularly overlooked. This was the main slope between cryptocurrency and fiat currency in the United States before the signing closed, leaving few viable alternatives.
One US institution still catering to cryptocurrency investors is San Francisco-based Mercury, which has stepped up its marketing since federal authorities acquired SVB and Signature. Mercury, a fintech startup, uses its relationships with two federally insured institutions Evolve Bank and Trust and Choice Financial Group – to provide guarantees on deposits of up to $3 million, 12 times the regulatory limit.
Mercury CEO Imad Akhund said so via Twitter over the weekend “We’ve already landed 2x more customers today than we do on a normal weekday!”
