Cryptocurrencies such as Bitcoin rebound, and “credit anxiety” over Silicon Valley banks recedes

Macroeconomics and financial markets

In the US NY stock market on the 10th, the Dow closed at $345 (1.07%) lower than the previous day and the Nasdaq at $199 (1.76%) lower. The US Federal Deposit Insurance Corporation (FDIC) announced the bankruptcy of US Silicon Valley Bank (SVB) on the 10th. Concerns about the impact on the financial industry led to an increase in sell orders centered on financial and tech stocks.

In response to this, the Nikkei Stock Average dropped 437 yen from the previous weekend on the Tokyo stock market at the beginning of the week.

Last weekend’s jobs report showed a stronger-than-expected U.S. economy, but wage growth fell short of expectations and the unemployment rate rose. Concerns over the pace of interest rate hikes have receded, and the CPI (U.S. Consumer Price Index) has been deferred as an indicator of inflation and the basis for determining interest rate hikes.

connection:US stocks and NY Dow fall for 4 days in a row Silicon Valley Bank collapse raises financial anxiety | 11th Financial Tankan

connection:Stock investment recommended for cryptocurrency investors, representative cryptocurrency stocks of Japan and the United States “10 selections”

Virtual currency market

In the crypto asset (virtual currency) market, bitcoin rebounded sharply to $22,330, up 8.79% from the previous day.

Over the weekend of the previous week, Silicon Valley Bank (SVB), whose counterparty’s cash flow deteriorated due to a sharp rise in US interest rates, went bankrupt. 450 billion yen), it caused a sharp price divergence (Dipeg) of USDC.

At several crypto asset (virtual currency) exchanges such as Bitstamp, the USDC price plunged to the lower $0.8 level at one point, and investor sentiment deteriorated sharply. The crypto asset (virtual currency) market was down across the board.

However, by the beginning of the week, the USDC’s negative divergence had been resolved, and the market sentiment improved when the SVB acquisition proposal and the financial authorities’ emergency loan facility were announced to protect customer assets. The USDC peg has also recovered to almost $1.

It seems that the bad news continued in the past few weeks, leading to a reactionary surge in crypto assets (virtual currencies) that had been at oversold levels.

connection:Will Bitcoin continue to fall sharply due to the financial crisis of US financial institutions, will the predicament continue | bitbank analyst contribution

Circle’s $3.3 billion represents 8% of the USDC’s $40 billion reserves. Affecting the DeFi (decentralized finance) market, Maker DAO approved an urgent proposal to cut USDC, which accounted for nearly half of $4.4 billion as collateral for the stablecoin DAI.

“USDC is 100% backed by a combination of cash and Treasuries,” Circle said in an official statement.

Of the USDC reserves held by BNY Mellon, a major US financial holding company, 77% ($32.4 billion) is secured by short-term Treasury bills (T-Bills) and 23% (9.7 billion dollars) U.S. dollars) in six financial institutions, but SVB is only one of them, so the impact will be limited.”

In addition, “USDC issuance and redemption depends on the business hours of the partner’s banking system, so it will be processed collectively at the beginning of the week. 1:1 redemption with the US dollar will be possible without problems.” “From SVB If it takes time to recover the capital, we will make up for it with our own funds and external capital based on the regulations,” he said in an effort to dispel concerns.

Sharing an Update on USDC and Silicon Valley Bank. https://t.co/Ug3qpot8sJ

— Jeremy Allaire (@jerallaire) March 11, 2023

connection:Circle CEO Emphasizes Safety of USDC Reserve Stablecoin

In an interview with Face the Nation on the 12th, Treasury Secretary Janet Yellen said, “We are not considering a bailout of Silicon Valley banks by the U.S. government.” “The U.S. banking system is well-capitalized and secure, and we will keep an eye on it to make sure it doesn’t spread to other banks.”

On the other hand, the U.S. Treasury Department and the U.S. Federal Reserve Board (FRB) announced on the 12th that they will set up an emergency loan facility “Bank Term Funding Program (BTFP)” for financial institutions to protect all deposits of customers. It appears that the measures were taken to protect the financial system from systemic risks and to prevent bank runs in many directions.

Newly ceased U.S. signature banks are also covered, but shareholders and some debtors are not covered.

The Federal Deposit Insurance Corporation (FDIC), which has stepped in as bankruptcy trustee, has launched a competitive bid to sell SVB’s business, with multiple buyers interested, the people said.

connection:Bank of London and others offer takeover of bankrupt SVB UK entity

Silicon Valley Bank is a major lender for startups (startups), and in crypto asset (virtual currency)-related venture capital, Andreessen Horowitz (a16z) is about $ 2.85 billion, Paradigm is about $ 1.72 billion, Pantera Capital is said to have deposited $560 million, and there are concerns about the impact on the Web3 industry.

[Recruitment]Recruitment of new personnel due to Web3 business expansion

Japan’s largest cryptocurrency media CoinPost is looking for full-time employees and interns as it expands its Web3 business.

1. Media Business (Editorial Department)
2. Marketing operations
3. Conference management and launch work
4. Open Position (students welcome)

Details https://t.co/UsJp3v8mSH pic.twitter.com/B98JZmoQbW

— CoinPost-virtual currency information site-[app delivery](@coin_post) February 14, 2023