Binance Considers Allowing Traders to Store Collateral in Banks
In a recent report, Binance, the world’s largest cryptocurrency exchange, is exploring the possibility of allowing some traders to store their collateral in banks. This innovative approach could significantly reduce counterparty risk and enhance the security of trading operations.
Binance Plans To Reduce Counterparty Risks
Binance has always been at the forefront of innovation in the crypto world, and this latest move is no exception. The exchange is in discussions with some of its professional clients about a new setup that would allow them to use bank deposits as collateral for margin trading in spot and derivatives markets, as per four sources cited by Bloomberg on Tuesday.
This would be a significant departure from the current practice, where traders are required to store their collateral on the crypto platform.
This comes after the FTX failure, which has prompted crypto funds to advocate for changes in how collateral is managed. By enabling traders to use bank deposits as collateral, Binance aims to reduce counterparty risk and enhance the security of trading operations
Among the individuals Bloomberg consulted, two named Swiss-based FlowBank and Liechtenstein-based Bank Frick as possible intermediaries in this proposed setup.
Bloomberg reported:
“Under one version of the proposal Binance has discussed, clients’ cash at the bank would be locked up through a tri-party agreement while the exchange lends them stablecoins to serve as collateral for margin trading. The cash kept with the bank could then be invested in money-market funds to earn interest, helping to compensate for the cost of borrowing crypto from Binance, they said.”
Binance Aims To Bridge The Gap Between Traditional Finance And Crypto
If implemented, this move could have far-reaching implications for the crypto market. It could set a new standard for other exchanges to follow, potentially leading to a broader shift in how collateral is managed in the crypto trading world. Moreover, it could also help to bridge the gap between traditional finance and the crypto world, making it easier for institutional investors to enter the crypto market.
Amidst increased scrutiny from US regulators, Binance, the world’s largest cryptocurrency exchange, is exploring a new approach to protect its clients. Crypto exchanges, including Binance, have been under the regulatory microscope for their practice of amalgamating multiple services, such as custody, brokerage, and lending.
When crypto intermediaries, like Binance, mix together different services such as custody, brokerage, and lending, it can lead to conflicts of interest and potential risks for investors.
This is something that the Securities and Exchange Commission (SEC) doesn’t allow in any other financial marketplace. SEC Chair Gary Gensler emphasized this point during his recent testimony before the US House Financial Services Committee.
In light of this, Binance is considering a new approach. The crypto exchange is thinking about letting traders use bank deposits as collateral for margin trading. This move is seen as a proactive step to reduce these potential conflicts and risks, and ultimately, to better protect their investors.
Indian CBDC Pilot Program Gains Momentum: Extended to More Banks and Locations
In its annual report, the Reserve Bank of India (RBI) disclosed its strategic initiative to extend the ongoing pilot of the Central Bank Digital Currency (CBDC) to a wider array of locations and banks.
With the objective of enhancing the national digital currency, the central bank intends to introduce additional use cases and incorporate new features throughout the course of this year.
RBI to incorporate more banks for CBDC pilot
According to the annual report released by the Reserve Bank, the phased introduction of the Central Bank Digital Currency (CBDC) took place throughout the year. The pilot programs for the Digital Rupee were initially launched on November 1, 2022, and December 1, 2022, for the wholesale and retail segments, respectively.
Presently, there are plans to expand the CBDC-Retail pilot to encompass additional locations and involve a greater number of participating banks.
The CBDC pilot included four banks in the beginning: ICICI Bank, Yes Bank, the State Bank of India, and IDFC First Bank. Subsequently, four more banks, namely the Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank were included in the initiative.
Currently, five additional banks, namely Punjab National Bank, Canara Bank, Federal Bank, Axis Bank, and IndusInd Bank are in the process of joining the pilot, further expanding the scope and reach of the program.
India and crypto
India’s stance on cryptocurrencies has been the subject of evolving regulatory discussions and considerations. The Reserve Bank of India (RBI), the country’s central bank, has expressed concerns regarding the potential risks associated with cryptocurrencies.
The government has also indicated its intention to introduce a central bank digital currency (CBDC), which would be regulated and controlled by the RBI.
Overall, India’s stance on cryptocurrencies remains a delicate balance between exploring the potential benefits of blockchain technology and considering the need for appropriate regulations to address potential risks and concerns.
Big Short Investor Michael Burry Reveals Portfolio: Why Is He Betting On Distressed Banks?
In a surprising move, renowned investor Michael Burry has unveiled his latest portfolio, signaling his confidence in distressed US regional bank stocks. Burry, best known for his successful bet against the 2007 mortgage bond market, is once again making waves in the investment community with his strategic choices.
As the US regional banking crisis continues to get worse, his selection displays some hope. Read on for some interesting insights!
A bet on Sinking boats?
The US banking crisis has underscored the disparity between Wall Street giants and smaller banks, with Silicon Valley Bank and Signature Bank being hit the hardest. This turmoil has created a climate of fear and uncertainty among investors. However, Burry, known for his contrarian approach, sees opportunity where others see risk. He believes that this crisis presents a unique buying opportunity, as the stocks of these distressed banks trade at their lowest levels.
Burry’s Portfolio
According to his annual shareholder report, he has strategically invested in a range of distressed banks, including New York Community Bancorp, Capital One, Wells Fargo, Western Alliance Bancorp, Huntington Bancshares, PacWest, and First Republic Bank.
Additionally, his portfolio includes major holdings in JD.com and Alibaba Group.
Like Jerome Powell said earlier these banks heavily depend on big shots to invest while most of the top-rated US banks are still healthy, despite the slump.
Another Market Bottom On The Horizon?
Drawing parallels to his famous short position against the 2007 mortgage bond market, Burry has indicated that he envisions a similar scenario unfolding in March 2023. This prediction has garnered attention and piqued the interest of market observers who closely follow his investment moves.
As Banks Fail and Bitcoin Heads Back to $25,000, Learn How yPredict Might Make You Some Profit in the Meantime
Bitcoin fell by a small but worrying 3% today as the cryptocurrency rolled over from the $30,000 high and slipped as low as $28,290 during the session. The worrying part about the rollover is that BTC has attempted to reclaim territory above $30,000 since mid-April and has failed on each attempt. Furthermore, today’s price drop was a reaction to another wave of banking concerns after First Republic Bank looked for a buyout deal following the Silicon Valley Bank and Signature Bank collapse.
As a result of the repeated failed attempts to reclaim $30,000, analysts are starting to believe BTC might be heading back beneath $25,000 before being able to push higher again. However, while Bitcoin falls, it seems that investors are starting to rotate their profits into a new presale project designed to make traders more consistently profitable. yPredict is a next-generation AI-based trading research and analysis platform designed to give traders a deeper insight into the market – allowing them to make better trading decisions.
With volatility rising in the market, it’s unsurprising to learn that whales are expecting huge returns from this project, as it will help traders earn additional profits if the market sinks.
Bitcoin Tumbles On Extended Banking Crisis Fear as Analysts Predict Imminent Corrective Move
Despite the 70% price surge from the 2023 opening price of $16,530, today’s 3% price drop might be an indication of the next direction where Bitcoin wants to head – which many analysts believe to be beneath $25,000. Bitcoin has repeatedly made attempts at the $30,000 since mid-April and has, unfortunately, failed to break and hold above the level on each attempt. As a result, top analysts believe that Bitcoin is ready to sink in the short term as a retracement starts to form.
One analyst, in particular, believes that Bitcoin is ready for an imminent correction due to the massive pool of short stops resting above the $30,000 level for BTC. The analyst, Justin Bennet, shared a heat map of all the shortstops above $30,000 and the long positions placed at $26,000. He believes that Bitcoin is likely to trade within this region as a major correction is imminent;
This week’s Bitcoin price drop was largely a result of further extended banking fears as the crisis continues. The US financial regulator, The Federal Deposit Insurance Corporation (FDIC), is currently working out the First Republic Bank buyout deal, bringing in three major banks to help the process. According to reports, the FDIC has officially received several bids from JPMorgan Chase, PNC, and Citizen to buy out the bank and save it from collapse.
Inflation and High Interest Continue to Add Uncertainty
Furthermore, today’s Bitcoin price drop might be a result of the upcoming Federal Open Market Committee meeting scheduled for May 2 to May 3. The FOMC meets regularly to announce new interest rates in the financial markets, with the latest wave of meetings in the past year providing considerable interest rate hikes in the process.
Currently, the US Federal funds rate sits between 4.75% and 5% after a slew of aggressive rate hikes through 2022 – which was the main reason Bitcoin tumbled from its all-time high prices. The US Federal Reserve has been on a mission to increase interest rates to effectively combat rising prices of goods and services in the economy – known as inflation.
The market expects the FOMC to announce another 25 basis point hike in this week’s meeting, with many analysts hoping this would be the final interest rate hike for a while as inflation starts to cool off. Data from the Consumer Price Index (CPI) showed that inflation was up 5% year-on-year in March, which was a significant reduction from the 6% seen in February.
With that being said, let us take a look at the charts and highlight the important areas of support and resistance moving forward for Bitcoin.
BTC Price Prediction: Is BTC Heading Back to $25,000?
Looking at the daily chart above, we can clearly see the impressive bullish run that Bitcoin has witnessed since the start of the year. The cryptocurrency is now up by more than 70% since the beginning of Q1 2023, although it’s starting to lose some of its gains to the market. The bulk of the surge in 2023 came during March when BTC bounced from support at $20,000 and started to surge as high as $29,350.
In April, BTC finally managed to breach the resistance at $30,000 – reaching as high as $31,000 in the process. But, unfortunately, we can see that BTC could not push much higher than $31,000 as a rising resistance trend line – active since January 2023 – stalled the growth. Since then, BTC has headed lower, dropping as low as $27,000 during April.
Last week, we can see that BTC found support at $27,000 again and bounced higher throughout the latter half of the week. However, BTC is struggling to overcome resistance at $29,350 – provided by the July 2021 lows – and has since reversed from the level.
Looking ahead, the first major level of support beneath the market lies at $28,200. This is then followed by support at $27,750 (Jan 2021 lows), $27,000, and $26,400. If the sellers continue to drive the price of Bitcoin beneath $26,000, added support is then expected at $25,415 (May 2022 lows) and $25,000.
If the inflation and banking crisis narratives continue to cause BTC to break beneath $25,000, further support toward the downside can be located at $24,235 (December 2020 resistance), $23,000, $22,650 (December 2020 support), and $21,600.
On the other side, if the buyers can reverse from the current support at $28,200, resistance is first expected at $29,350 (July 2021 lows). This is followed by resistance at $29,890, $30,000, and $31,000.
Unfortunately, the RSI shows the market momentum with the bears as it dips beneath the 50 level. If it continues to sink, we can expect the bearish market momentum to increase and BTC to continue on its corrective path.
Meanwhile, as the market starts to drop, traders are constantly reminded that they can still make money if the market moves up or down. There’s one project that’s starting to make the process of becoming a consistently profitable trader much more attainable. Let us introduce you to yPredict – the latest presale that’s beginning to gain considerable traction within the market.
yPredict – Helping Traders Become Better
yPredict is a next-generation AI-based trading research and analysis platform that lets users get data-driven analytics to help them make better trading decisions to become more profitable. The project is spearheaded by AI/ML experts, financial quants, and traders, who have all come together to produce a range of products that provide state-of-art financial prediction methods and metrics to make wise trading decisions.
As financial markets continue to lose their predictability, which is largely a result of bots and algorithms entering the market, traders are losing their statistical edge – making it extremely difficult for them to become successfully profitable traders. yPredict aims to change this dynamic and help traders get their edge back. By providing users with data-driven insights, proven analytical metrics, and predictive marketplace trends, yPredict expects to help traders make more informed decisions when placing trades.
yPredict has created an ecosystem that lets users stay up-to-date with the latest market trends, helping them to notice the next big market movement before it happens. Overall, the platform consists of a marketplace, a suite of trading tools, a trading terminal, and high APY staking pools.
Extensive Product Suite Designed for Everybody
The yPredict extensive suite of products is where traders will head to get the latest market insights and predictions. Overall, yPredict has the following products;
- Market Predictions – check asset price predictions.
- yPredict Analytics – get an edge in financial markets.
- yPredict Marketplace – connect traders with developers.
- yPredict Terminal – place advanced trades.
These products combine together to provide all traders with the information required to get their statistical edge in the market and make better trades.
The Market Predictions product is an open platform that lets users check asset price predictions generated through in-house developed predictive models and selected developer models from the yPredict Marketplace. This part of the platform is designed to be fully open to all users to serve as an inbound traffic system for the project. As a result, everybody can use this section without the need to log in or hold any YPRED tokens.
The yPredict Analytics section is the place for traders to go to get an edge in the financial markets. The team is on a mission to develop a new breed of trading tools that are entirely powered by AI. Some of the features of this product include pattern recognition, sentiment analysis, indicator analysis, and transaction analysis.
The yPredict Marketplace is where millions of AI/ML developers already established in the financial sector can earn an income. The marketplace is designed to connect traders with developers, allowing developers to list their price prediction models as a results-as-a-service endeavor. Developers post their prediction models, and then users can subscribe to the service using YPRED tokens on a monthly basis. The developers will earn 70% of the revenue, with 20% going back into the ecosystem through liquidity and the final 10% going to token holders.
Finally, the yPredict Terminal is where professional traders can execute advanced orders to trade the market.
The great part about this suite of products is that YPRED holders have full access to the yPredict analytics platform at no extra cost – they just need to hold the tokens in their wallets. The primary utility behind the token itself is the platform subscription model, which lets users subscribe to prediction models in the ecosystem.
yPredict Presale Providing Incredible Early-Stage Opportunities
The yPredict presale for the YPRED token has been flying off the shelf in recent weeks as investors quickly rush to this groundbreaking analytical software suite. Investors believe that its subscription model and its ability to make traders more profitable will result in huge returns on their investments.
The presale sells the YPRED token, a Polygon chain token. The best part about the token is that it comes with a 5% Buy Tax and a 7% Sell Tax. The tax is used to increase the liquidity pool and to continue ongoing development, marketing, and research.
The presale is currently in the fourth stage, selling the token for a price of $0.05. However, it’s important to note that the presale is using an increasing pricing strategy, meaning that the price for the token will rise during subsequent presale stages. For example, once the presale crosses the $932,000 fundraising milestone, the fifth stage will commence, and the price for the YPRED token will rise by 28% to $0.07. As a result, those investing in the earlier stages of the presale will benefit the most as they invest at lower prices and leave the fundraising with higher unrealized gains.
Overall, with Bitcoin starting to take a dip, yPredict is building a platform that will help traders make money, whether the market is going up or down. As a result, investors are rushing to this revolutionary trading platform as the value of the token will rise alongside platform usage.
First Republic Bank’s Dramatic Collapse Ends with JPMorgan Takeover
First Republic Bank, a former powerhouse in the American banking industry, saw its dramatic downfall come to an end as JPMorgan Chase acquired the bank after the Californian financial regulator took possession today, May 1st, 2023. This marks the third failure of an American bank since March, after unsuccessful attempts to convince other financial institutions to rescue the struggling bank.
JPMorgan Chase’s acquisition of First Republic Bank includes all deposits, even uninsured ones, and a considerable majority of assets. Following the announcement, JPMorgan’s shares saw a 2.6% increase in premarket trading.
Regulators Step In
The California Department of Financial Protection and Innovation (DFPI) took control of the bank and appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver. JPMorgan’s bid for the bank’s assets was subsequently accepted by the FDIC.
In a statement, the FDIC confirmed that First Republic Bank’s 84 offices across eight states would reopen as branches of JPMorgan Chase Bank, and National Association during regular business hours. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and have unrestricted access to their deposits.
An Opportune Acquisition
Jamie Dimon, Chairman and CEO of JPMorgan, highlighted that the takeover minimized costs to the Deposit Insurance Fund. He emphasized that the government encouraged JPMorgan and others to step up, and that the acquisition is not only beneficial to the company overall but also accretive to shareholders, advances their wealth strategy, and complements their existing franchise.
As of April 13, 2023, First Republic Bank had total assets amounting to $229.1 billion and total deposits of $103.9 billion. Alongside assuming all deposits, JPMorgan Chase Bank, National Association, agreed to purchase a substantial majority of First Republic Bank’s assets.
Loss-Share Transaction
The FDIC and JPMorgan Chase Bank, National Association, will enter a loss-share transaction involving single-family, residential, and commercial loans purchased from the former First Republic Bank. Both parties will share in the losses and potential recoveries on the loans covered by the loss-share agreement.
This arrangement is designed to optimize asset recoveries by keeping them in the private sector and minimizing disruptions for loan customers. Additionally, JPMorgan Chase Bank, National Association, will assume all Qualified Financial Contracts.
The resolution of First Republic Bank was the result of a highly competitive bidding process and adhered to the least-cost requirements of the Federal Deposit Insurance Act. The FDIC estimates that the cost to the Deposit Insurance Fund will be approximately $13 billion. However, this estimate is subject to change when the FDIC terminates the receivership.
Peter Schiff Warns of Impending Financial Crisis: Banks’ Failure Just the Beginning
Renowned economist and investment advisor Peter Schiff recently appeared on TraderTV to share his views on the recent failures of Silicon Valley Bank and Signature Bank, and how this indicates that the United States banking crisis is far from over. According to Schiff, the underlying reasons for these bank failures were the result of the U.S. Federal Reserve’s policy of low-interest rates, combined with the inherent moral hazards of government-insured banking.
Bank failures are just the beginning of a major financial crisis
Peter Schiff explained that these banks’ failures were just the beginning of a much worse financial crisis, which is yet to come. He further highlighted that nobody is marking the assets to market and that banks are pretending that their overpriced assets are worth more than their real value, which is leading to insolvency.
In the current U.S. banking system, government-insured banking enables banks to cover at least some of the losses that their depositors suffer. In the case of Silicon Valley Bank and Signature Bank, the losses were covered 100% by the government. This has made the FDIC insurance infinite, as the government gets its money from the Fed, which in turn, prints money. Peter Schiff warns that this will lead to inflation, which will ultimately wipe out the value of everyone’s bank accounts.
Moreover, Peter believes that this is not just a banking crisis, but a major financial crisis, which is worse than the 2008 crisis. He argues that people are not willing to call it a financial crisis because they do not want to evoke memories of the 2008 crisis, but this is not helping the situation. Peter confidently said that this is a debt crisis, and banks are failing because of bad debt.
The expert argues that if interest rates had not been kept low for so long, these failures would not have happened. He also suggests that interest rates need to go up to prevent further failures and a bigger crisis.
Chinese Banks Seek To Invest In Crypto & Web3 Startups Amid Global Crisis
The cryptocurrency market has seen a surge in popularity amidst the ongoing global banking crisis and high inflation, leading banks in Mainland China to seek ways to invest in digital assets. Despite the ban on cryptocurrency trading and related businesses by the People’s Bank of China in 2021, Mainland China residents are finding unorthodox methods to access the Web3 industry and invest in the digital asset market.
Usage of VPN and Fake Proof-of-Residence
To access the Binance crypto trading platform, Mainland China residents are reportedly using VPN and fake proof-of-residence. This allows them to bypass China’s strict regulations and participate in the cryptocurrency market. Additionally, Bitcoin prices have gained nearly 70 per cent year-to-date while the traditional stock market is either lagging in negative gains or minimal volatility.
Hong Kong Arms of Chinese Banks Seek to Invest in Web3 Startups
According to a report by Bloomberg, Hong Kong arms of Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank have sought to invest in Web3 startups. The fall of three US regional banks has seen Asian investors migrate from American financial institutions to local firms.
The Hong Kong Monetary Authority (HKMA) has stated that it takes nearly three months for crypto-related businesses to open a corporate bank account in Hong Kong.
Crypto Adoption in Hong Kong To Surge
The entrance of the Chinese banking sector in Hong Kong could significantly bump crypto mainstream adoption in the region. This move could be a game-changer for the crypto industry in Hong Kong and beyond, as Chinese banks are known for their influence and investment power.
“It would be great if local banks could start some trial program to support crypto firms and more professional service providers that understand our native environment,” said Dominic Law, chief Metaverse officer of Neopets Metaverse, a game backed by Chinese firm NetDragon Websoft Holdings Ltd. “The business landscape would certainly be more welcoming and easier to support more startups to develop in this field.”
186 Banks at Risk – Is the US Banking System on the Verge of Collapse?
A recent study by economists has revealed a chilling reality: 186 US banks are facing a potentially devastating risk due to issues similar to those that caused the collapse of Silicon Valley Bank. With interest rates on the rise, many banks are finding their assets diminished and their futures uncertain.
Asset Books and Market Value Losses: A Recipe for Disaster
The study evaluated individual US banks during the Federal Reserve’s swift rate-hike campaign, assessing asset books and market value losses. These assets – including Treasury notes and mortgage loans – are decreasing in value, and banks are struggling to keep up. This could be the beginning of the end for many financial institutions.
Funding Percentages: A Ticking Time Bomb
The study also analyzed the banks’ funding percentages, with a focus on funding derived from uninsured depositors, those with accounts holding over $250,000. The findings suggest that if even half of these uninsured depositors were to withdraw their funds rapidly from any of these 186 US banks, even insured depositors might face impairments. This is a ticking time bomb that could spell disaster for the entire banking industry.
Potential for FDIC Intervention: Will It Be Enough?
In such cases, intervention from the Federal Deposit Insurance Corporation (FDIC) could become necessary. The FDIC is a government agency that provides insurance to depositors in case of bank failure. However, if half of the uninsured depositors were to withdraw their funds, even the FDIC may not have enough resources to protect all depositors. The question is, will it be enough to prevent a catastrophic collapse of the banking system?
Limitations in the Study: What’s Not Being Considered?
It is crucial to note a significant limitation in this research. The study does not consider hedging strategies that may safeguard numerous banks against rising interest rates. These strategies involve financial instruments that protect against losses in value due to market fluctuations. Is there a glimmer of hope for the banking industry, or is it too little too late?
This study highlights the urgency of regular financial stability assessments and the importance of informed decisions by depositors when choosing a banking institution. The question remains – will we sit idly by, or will we take action to prevent a looming financial disaster?
The US Banking Crisis’s Domino Effect: Which Banks Could Be Next To Fall?
There have been numerous financial industry crises recently, which have created tremendous chaos. Initially, when FTX’s stock fell, another victim was claimed by the collapse of the well-established US Bank Silvergate capital.
In a collapse that shook international markets, SVB Financial Group, a lender with a focus on startups, on March 10 became the largest bank to fall since the 2008 financial crisis. The passing of Signature, which had $100 billion in assets, is a shock to many professional services companies that had grown dependent on it.
Lender Credit Suisse, situated in Zurich, faced the effects of the contagion brought on by Silicon Valley Bank’s failure. In the opening session of trading on Switzerland’s stock exchange, shares of Credit Suisse hit a new low.
These incidents never occur in isolation and almost always affect the market more severely.
Will additional institutions be in jeopardy now? Read on.
Scott Hamilton on the collapse and its repercussions
Scott Hamilton who is the contributing editor in Finextra Research has explained the failure of SVB. Silicon Valley Bank (SVB) went bankrupt this week, taking with it a 40-year legacy rooted in the ingenuity and optimism of its namesake Northern California home. Everyone is wondering what will happen now that the over $200 billion deposit institution that may have banked about 50% of all IT businesses has gone bankrupt.
A review of recent events and possible outcomes of the SVB closure and, to a lesser extent, the failure of the smaller Signature Bank of New York reveals a wide range of opinions. While many believe that the breakdown revealed systemic problems, some claim that the worst of the crisis has passed.
Several regional banks’ shares were crushed over the weekend as a result of the SVB debacle. Three institutions with heavy concentrations in technology and venture capital experienced major ‘market hangovers’ from weekend events.
They are Western Alliance Bancorporation which has lost 84% to its March 8 close price just above $71 per share, First Republic Bank whose stock slumped to a mere $20, from $147, and Pacific Western Bancorp which declined over 50% since its previous close on March 10, leaving it trading at below $6 a share, compared to nearly $29 per share.
After the recent closure of Silicon Valley Bank (SVB), many corporations have disclosed their exposure to the now-collapsed bank. Companies that have disclosed exposure with Silicon Valley Bank are Circle: $3.3 billion, Roku: $487 million, BlockFi: $227 million, Roblox: $150 million, Ginkgo Bio: $74 million, IRhythm: $55 million, RocketLab: $38 million, SangamoTherapeutics: $34 million, LendingClub: $21 million and Payoneer: $20 million.
In his prediction, Hamilton claimed that there could be “dominoes” among the remaining American financial institutions, particularly the local, smaller banks that have succeeded, like SVB.
Top Expert Says Bitcoin Price Rally Will Continue Despite U.S. Banks Failing
Bitcoin’s price action has been a topic of concern for traders and investors worldwide. Expert Michael van de Poppe recently shared his technical analysis of the cryptocurrency, highlighting its potential for a rally amidst the ongoing collapse of the US banking system.
Van de Poppe, a well-known trader, and analyst emphasized the importance of yields falling apart and the potential for the Federal Reserve to pivot or pause its hiking process to open the gates for risk-on assets. He also warned of the systemic issue in the US banking system, with several banks collapsing, including Pac-west Western Alliance and First Republic Bank.
The Technical Analysis of Bitcoin
Van de Poppe noted that Bitcoin has been falling due to fears surrounding stablecoins, but the recent rescue plan by the Federal Reserve has helped stabilize the market. He also mentioned that the technical point for Bitcoin shows a downtrend since its high, with a bearish divergence at $19.7k.
Van de Poppe further stated that Bitcoin’s recent rally towards $23.5k is a crucial resistance point, but ultimately, the chart shows a potential for a continued rally. The optimal long entry for Bitcoin is at 21.3 K, and any move between $22.2K to $22.5K is a proper entry for longing.
The Banking System Collapse in the US
The top analyst emphasized that the US banking system is collapsing, with several banks on the brink of collapse, including Pac-west Western Alliance and First Republic Bank. He noted that the rescue plan by the Federal Reserve is only saving the banks with specific assets in their portfolio, which means that systemic issues are still present.
Van de Poppe also warned of the potential impact on the real estate and debt markets, stating that the shock takes time to manifest. He urged traders and investors to be cautious during this period, as heavy corrections could lead to selling pressure taking over.
Investors of Affected Banks Won’t Receive Bailout, says President Biden
Following the collapse of Silicon Valley Bank, US President Joe Biden assured Americans on Monday that their banking system is secure and voiced his desire for stricter regulations to avoid such disasters.
Both Silicon Valley Bank and Signature Bank have partnerships with companies that deal in cryptocurrency, making them their preferred banking partners. With both banks now shut down, questions about how they will continue to facilitate payments in the crypto industry as a whole are raised. SVB and Signature have both been identified by the Fed and Treasury Department as systemic risks to the financial system.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them. While the government is ensuring that SVB depositors get their money back, “no losses will be borne by the taxpayers. The money will come from the fees that banks pay into the deposit insurance,” Mr Biden said.
He made it clear that he expects those accountable to bear the consequences and that the government’s quick action over the weekend did not entail a bank bailout, as was the case in 2008.
“We must get the full accounting of what happened and why, (so) those responsible can be held accountable. Not only will taxpayers not be liable for covering the deposits, but the management of these banks will be fired,” he said.
On Sunday, officials intervened to compensate Silicon Valley depositors. Meanwhile, the Fed declared that it would begin a Bank Term Financing Program, which would provide banks with additional funding to satisfy the demands of their depositors. Moreover, regulators shut down Signature Bank over the weekend
All deposits from Silicon Valley Bank have been transferred to a newly established bridge bank, according to a Monday announcement from the U.S. Federal Deposit Insurance Corporation. As a result, all account holders will have access to their money starting on Monday morning.
Biden Administration Bails Out Failing Banks, Vows To Hold All Responsible
In a shocking turn of events, two major U.S. banks, Silicon Valley Bank and Signature Bank, have collapsed. The Federal Reserve quickly took action, and United States President Joe Biden announced that those responsible for the banking mess will be held accountable.
While the cause of the collapse has yet to be fully disclosed, it is believed to be a systemic failure rather than an individual-centric problem. In response to the crisis, the overall confidence in top cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Binance (BNB) has significantly increased.
Biden’s Commitment to Accountability
President Biden took to Twitter to express his commitment to holding those responsible for the collapse accountable.
“I’m firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” he wrote.
The Federal Reserve Board and Treasury Secretary Janet Yellen have announced a $25 billion bailout of Silicon Valley Bank and Signature Bank.
The Bigger Picture
The collapse of Silicon Valley Bank and Signature Bank marks the third bank to fail after Silvergate Capital announced voluntary liquidation. The fear of more banks collapsing due to bad debts and non-performing loans has caused a migration en masse to top crypto assets, including Bitcoin and Ethereum. Binance has even converted the remaining $1 billion in Industry Recovery Initiative funds from BUSD to Bitcoin, Ethereum, and BNB.
Criticism of Biden’s Handling of the Bailout
Not everyone is happy with the Biden administration’s handling of the bank bailout. Veteran economist Peter Schiff has criticized the administration for printing more money to save failing banks. He believes that the administration’s lack of commitment to fighting high inflation will only exacerbate the problem.
Federal Reserve Takes Bold Move to Protect Banks from Crypto with Enhanced Guidance and Supervision
In recent years, the rise of cryptocurrency has caused a lot of excitement and controversy in the financial world. While some see it as the future of money, others warn of its potential dangers, particularly for traditional banks. As the collapse of the Silvergate bank has taught the risks related to crypto investments, several central banks are now taking strict measures to protect investors from crypto threats. In response, the Federal Reserve is considering a bold move to safeguard banks from the risks posed by crypto.
Fed to Issue More Guidance to Banks
During a speech in Washington, Michael Barr, the Vice Chairman for Bank Supervision at the Federal Reserve, stated that the Fed, along with other regulators, is actively considering how to conduct certain crypto-asset activity in a manner that aligns with safe and sound banking practices. In addition, Barr announced that regulators are currently investigating crypto assets and will provide additional guidance to banks interested in investing in them.
According to the highest-ranking regulatory official of the US Federal Reserve, while cryptocurrency technology still holds the potential for transformative effects on the financial system, it requires “guardrails” in order to fully realize these benefits.
Barr acknowledged that the recent instability in the crypto market highlights the potential risks the sector could pose to traditional banks. However, he also noted that regulators’ cautious approach has helped mitigate any significant impact. He said,
“Banks should take a careful and cautious approach to engaging in crypto-asset related activities and the crypto sector. We would likely view it as unsafe and unsound for banks to directly own crypto assets on their balance sheets.”
Fed Ensures Safety While Dealing with Crypto Sector
Over the past few months, U.S. bank regulators, including the Federal Reserve, have implemented several measures to ensure banks exercise caution when dealing with the crypto sector. These measures include mandating that banks report any crypto activities to regulators before proceeding and cautioning firms about the high volatility of crypto deposits.
Mr. Barr said, “In addition to sharing what we learn with the public on an ongoing basis, we are also enhancing our supervision of these activities.”
Mr. Barr revealed that the Federal Reserve is in the process of assembling a team of experts to educate officials about the latest developments in cryptocurrencies. While investors have shown a growing interest in crypto assets, their value has experienced significant fluctuations in recent years, partly due to a series of scandals that have impacted investor confidence and resulted in steep price drops.
In prepared remarks, Barr stated that liquidity concerns are especially significant for banks that rely heavily on volatile deposits to fund a meaningful portion of their balance sheets. This statement followed Silvergate Capital Corp’s announcement of plans to liquidate after incurring substantial losses related to cryptocurrencies, which occurred just a day prior.
Ripple Pursues CBDC Development, In Talks With 20+ Central Banks
Ripple Labs, a leader in blockchain payments, continues to expand its services and partnerships to improve cross-border transactions. The company has been collaborating with international businesses and governments globally to develop faster and more efficient payment services.
According to Brooks Entwistle, Senior Vice President of Customer Success and Managing Director of APAC and MENA at Ripple, the company is in discussions with over 20 central banks regarding the development of a central bank digital currency (CBDC).
Customized Solutions for Central Banks
Entwistle acknowledged that each central bank and country has unique needs, and Ripple is working to provide customized solutions to meet their specific requirements. With over 200 countries in the world, there is significant potential for Ripple to expand its reach and develop innovative solutions for cross-border payments.
Ripple has already announced collaborations with Bhutan and Palau, and more partnerships are expected in the future.
Regulatory Environment and the Crypto Industry
While the United States has implemented strict regulations on cryptocurrencies, many other countries welcome discussions on the topic. Entwistle mentioned that regulators in Singapore, Tokyo, Switzerland, and the United Kingdom are open to dialogue and exchange of ideas.
He emphasized that regulatory discussions are a two-way process, and Ripple actively participates in panel discussions and meetings with regulators.
Ripple’s Long-Term Vision
Despite the current regulatory crackdown on cryptocurrencies, Entwistle remains optimistic about the industry’s long-term potential. He noted that the crypto industry is still in its early stages, and there is significant room for growth and innovation.
With the increasing demand for faster and more efficient payment systems, Ripple is well-positioned to capitalize on the opportunities presented by the market.
XRP price is exchanging around $0.37, up approximately 11.77 percent YTD.
US Fed Issues Warning to Banks on Crypto Liquidity Risks
Cryptocurrency regulatory scrutiny from United States financial authorities has increased recently, fueled by the Terra Luna UST and FTX collapse last year. With the motive of widening the use of the United States dollar as the global reserve currency, the respective agencies have widened the regulatory net to stablecoins and the crypto-staking sector.
This is evident by the fact that Binance-backed BUSD has already been hit by the regulatory wave and will no longer be minted. Additionally, the Kraken cryptocurrency exchange has had to cease offering its crypto staking program after the SEC deemed it unregistered security.
Coinbase Global Inc CEO Brian Armstrong has condemned the U.S. agencies’ crypto crackdown noting that the industry will shift overseas, where regulations are much friendlier.
Fed Warns Banks on Crypto Liquidity Crisis
According to a joint statement from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), the banking organizations in the United States should be aware of risks associated with cryptocurrency including liquidity crunch.
“This statement highlights key liquidity risks associated with crypto-assets and crypto- asset sector participants that banking organizations should be aware of.3 In particular, certain sources of funding from crypto-asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows,” the agencies noted.
The banks are expected to conduct due diligence before indulging in crypto-related business to avoid cases related to liquidity issues in the future. The agencies advised the banks to take note of the stability and demand of stablecoins, which require redemption solidity.
City Bank’s Report Lays Out The Aftermath Of The ETH Merge
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According to City Bank’s report, the transition volatility has remained subdued despite the high hopes after the Ethereum Merge was successful.
The merge involved the switch to a more energy-efficient proof-of-stake (PoS) consensus from a proof-of-work (PoW) process. Following the transition, rewards are now not given to the miners and the ETH issuance is estimated to plunge 90% to around 600,000.
ETH has become a yield-bearing asset after the removal of mining, with a current staking yield of 4.5%.
In the aftermath of the merge, the network activity has increased as ETH produces a yield for validators. However, the fees is still very low.