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The events of the last two weeks have been of particular interest to the crypto industry. First, the Centre brought cryptocurrency under the ambit of the Prevention of Money Laundering Act (PMLA), 2002. Later, three crypto-friendly banks in the USA fell one after the other. These were Silvergate Bank, Silicon Valley Bank, and Signature Bank. These events led to a fall in crypto prices. However, as of Friday, the crypto market was looking bright.
The total crypto market cap jumped from $922 billion on March 10 to $1.1 trillion on Friday, according to CoinMarketCap. The price of Bitcoin was up 33 per cent in the last week and was trading at $26,421 on Friday. Ethereum was up 23 per cent during the same period, trading at $1,728. Several other coins, like Polygon, Solana, Polkadot, Avalanche and Tron, were up over 20 per cent.
"Bitcoin remains on a solid footing, trading as high as $26,000 during these stressful times. It was Bitcoin's Layer-2 scaling solution Stacks (STX) that witnessed a huge surge of 50 per cent during the week," said Parth Chaturvedi, crypto ecosystem lead at crypto exchange CoinSwitch.
He added that the fall of crypto-friendly banks might push the crypto businesses to other countries like Switzerland and Hong Kong.
"Silvergate, SVB, and Signature, have been stifled, with access to US banking routes getting more difficult for crypto players. This will have a long-term liquidity impact and might also result in the offshoring of businesses to more crypto-friendly jurisdictions like Switzerland, Hong Kong, the UK, and Dubai," he said.
As the week proceeded, worrying reports emerged from Credit Suisse Bank. Its Saudi Arabia-based investors announced that they would no longer support the bank. The central bank of Switzerland later announced that it would provide $54 million to the bank for support.
Some experts believe that despite the bull run, investors must remain cautious.
"As we head towards the weekend, it could simply be a bull trap. It is prudent if investors let the market cool off before making any investments," said Alankar Saxena, CTO and co-founder of crypto firm Mudrex.
"While Credit Suisse received a $54 billion lifeline, the sector continues to experience infrastructure breakdowns. Overall, the rate releases this week had a net positive impact on the crypto markets, with upcoming rate hikes next week being a key event to monitor," said Anurag Dixit, founder of crypto asset management firm Kunji.
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First Published: Fri, March 17 2023. 16:39 IST
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