Cryptocurrencies surged close to 7 percent in the past 24 hours as renewed fears of a banking crisis in the U.S. gripped financial markets amidst the sell-off in California-based First Republic Bank.
Shares of First Republic Bank slumped more than 49 percent on Tuesday after it reported that deposits had fallen to $104 billion, despite the deposit of $30 billion received from a consortium of big banks in the month of March 2023. The 12th largest bank in the U.S. had reported deposits of $176 billion at the end of the previous quarter.
Shares of the San Francisco – based regional lender are down more than 21 percent on Wednesday, amidst concerns about the solvency of the regional lender as well as fears of a wider contagion.
The fears of a wider and deeper stress in the U.S. banking system have led to speculations about the Fed pausing on its continuing rate hikes. The prospect of a potential easing in the Fed’s Quantitative Tightening to support the liquidity woes of the banking sector has buoyed sentiment in the digital assets space.
Amidst wavering confidence in the U.S. banking system, the Dollar Index, a measure of the Dollar’s strength against a basket of 6 currencies dropped 0.72 percent to 101.13, from 101.82 a day earlier and 101.97 a week earlier. The Dollar’s weakness also helped lift the dollar-denominated prices of cryptocurrencies.
Safe haven demand was apparent in gold prices as well, with Gold Futures for June settlement rising 0.60 percent to $2,016.50 per troy ounce, from $1,994 on Tuesday and $1,979.50 on Friday.
Overall crypto market capitalization surged 6.9 percent overnight to $1.23 trillion, from $1.15 trillion a day earlier. Wall Street benchmarks, on the contrary are trading with nominal gains, implying a waning correlation between stock market and the cryptocurrency market.
Bitcoin jumped 9.1 percent overnight and 1.8 percent in the past week to trade at $29,852.10. BTC, which currently dominates 46.8 percent of the overall crypto market traded between a high of $29,995.84 and a low of $27,217.17 in the past 24 hours.
Ethereum gained 7.2 percent overnight to trade at $1,953.56. On a weekly basis, the leading alternate coin has lost 1.6 percent. Ether, which commands 19.1 percent of the overall crypto market traded between a high of $1,962.57 and a low of $1,805.32 in the past 24 hours.
BNB (BNB) gained 3.8 percent overnight and 4.8 percent in the past week. Meanwhile, Binance.US has backed out from a decision to acquire the assets of crypto lender Voyager Digital which had filed for bankruptcy earlier.
Bitcoin (BTC) and BNB (BNB) are the only 2 cryptocurrencies among the top 10 to trade with gains on a weekly basis.
6th ranked XRP (XRP) gained 4.7 percent overnight but has shed 3.6 percent on a weekly basis.
7th ranked Cardano (ADA) surged 9.1 percent in the past 24 hours but is yet to recoup weekly losses of 1.6 percent.
8th ranked Dogecoin (DOGE) gained 5.3 percent in the past 24 hours but is trailing the levels a week ago by as much as 7.9 percent.
9th ranked Polygon (MATIC) gained 9 percent overnight but is struggling with losses of 6 percent suffered in the past seven days.
10th ranked Solana (SOL) also lost more than 8 percent overnight, but weekly losses are lower at 2 percent.
The excitement surrounding Artificial Intelligence that got a boost with the upbeat results by Microsoft and Alphabet reverberated in the crypto space as well. The AI & Big Data category cryptocurrencies recorded an overnight jump of 11 percent in market capitalization, outperforming the broader market.
42nd ranked The Graph (GRT), the top ranked crypto in the category added close to 10 percent overnight. 60th ranked Render Token (RNDR), rallied more than 30 percent whereas 67th ranked Injective (INJ) surged 22 percent in the past 24 hours. 93rd ranked SingularityNET (AGIX), the second-best performing cryptocurrency among the top 100 cryptocurrencies on a year-to-date basis, also rallied more than 7 percent overnight.
Renewed fears of a banking crisis and the regulatory actions against the crypto industry continue to dominate crypto market sentiment. Amidst the uncertainty, markets are anxiously waiting for the Fed’s interest rate decision due next week.
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