Bitcoin jumps the most in almost a month after US supports banking sector

BITCOIN jumped the most in almost a month after US authorities sought to stem concern about the health of the nation’s financial system.

The largest cryptocurrency gained as much as 5.3 per cent to US$21,582, the biggest increase since Feb 15, after US agencies pledged to fully protect all depositors’ money following the collapse of Silicon Valley Bank (SVB) while also giving any banks squeezed for cash easier terms on short-term loans. Signature Bank was closed by New York state financial regulators while saying depositors will have access to their money.

“The Federal Reserve’s rescue plan has bolstered market confidence and allayed concerns about the potential collapse of additional players, particularly given that Signature is a major bank within the crypto industry,” said Rachel Lin, co-founder of SynFutures, a decentralised derivatives trading platform.

Other altcoins posted larger gains, with Cardano gaining about 6.1 per cent, Litecoin increasing 7.4 per cent, Tron jumping 12 per cent an Avalanche 6.7 per cent.

Bitcoin had posted its worst week since November as an equity selloff, jitters in the banking sector and an escalating US regulatory crackdown on crypto combine to hurt investor sentiment.

SVB’s failure triggered a knock-on effect in the crucial market for stablecoins after digital-asset giant Circle Internet Financial, one of the biggest issuers of the widely used tokens known for their perceived safety, revealed it had US$3.3 billion of reserves with the bank. The news caused Circle’s token, USD Coin, to slip below its intended 1-for-1 peg with the dollar, sending a shock through the market. It was trading at around 99 US cents. BLOOMBERG