Cryptos Stay Green Amid Banking Slump and USDC Depegging, According to Kaiko Analysts
According to analysts, while stocks are struggling to recover from the effects of the banking crisis, cryptocurrencies have managed to stay afloat.
The reason for this can be attributed, in part, to the actions of the Federal Reserve. The Fed’s recent intervention in the banking system has helped to inject liquidity into the market and reverse its policy of near-zero interest rates, which had been in place for the past decade.
As a result of this intervention, the Fed’s balance sheet has increased significantly, leading some to describe it as a form of quantitative easing.
Cryptocurrencies have also been affected by the recent depegging of Circle’s USDC from its dollar mooring, which has been linked to the banking crisis.
The collapse of Silicon Valley Bank, which held $3.3 billion in USDC reserves, has caused USDC to fall to an all-time low of around $0.87.
Binance’s native token, BUSD, has also been delisted from many trading platforms, which has led to some concern among analysts about the stability of the stablecoin market.
Of crypto trades involving fiat currently on the market, 47% are executed in dollars. Analysts are now asking whether the euro will emerge as the next dominant currency on exchanges or whether another fiat currency will take its place.