Risky assets pared or reversed early gains during the European trading hours as shares in San Francisco-based First Republic bank nosedived in premarket trading, reflecting investor angst over the banking sector's health. Bitcoin pulled back to $22,000, after it nearly tested its 50-day simple moving average at $22,900 during Asian daytime hours. The cryptocurrency is still up 8% in the last 24 hour as the Federal Deposit Insurance Corp. said all depositors of Silicon Valley Bank will have full access to their money beginning Monday morning. after confirming a successful transfer of deposits to a new bridge bank. The new bridge bank, called Silicon Valley Bank N.A., will be operated by the FDIC. Silicon Valley Bank was used by many tech companies, an area that includes crypto startups.

The cryptocurrency crisis went into high gear early Saturday as Silicon Valley Bank's failure caused some of the industry's core plumbing to go haywire. Stablecoin prices wildly swung and gas fees soared as investors scrambled to move money around hours after regulators shut SVB amid a run on the bank, which had ties to crypto. Circle Internet Financial's USDC stablecoin massively depegged from its intended $1 price – a harrowing development for a product designed as a place for investors to safely park money. The USDC/USDT pair sank as low as 87 cents on Saturday. It has since retreated to 99 cents. The financial-services company confirmed late Friday that about $3.3 billion of the reserves backing the world's second-largest stablecoin were tied up at SVB.

HSBC U.K. Bank is acquiring Silicon Valley Bank U.K. for 1 British pound, or the equivalent of $1.21, according to a filing Monday with the London Stock Exchange. As of Friday, SVB U.K. had loans of around $6.6 billion and deposits of around $8.1 billion, the filing read. "This acquisition makes excellent strategic sense for our business in the U.K.," HSBC Group CEO Noel Quinn said. "It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the U.K. and internationally."

The collapse of Silicon Valley Bank is a blessing for bitcoin, crypto observers said, drawing parallels to the 2013 Crypus crisis that underscored flaws in the fractional reserve system and brought attention to decentralized, censorship-resistant BTC as a hedge against centralized banking.

"Silicon Valley Bank, the 18th-largest bank in the nation, collapsed yesterday – with it, we learn how last year’s record selloff in U.S. Treasurys has created billions of dollars' worth of unrealized losses within the banking sector and gain yet another example that in a system of fractional reserve banking, there are no depositors, only lenders," researcher Nik Bhatia and market analyst Joe Consorti said in the latest edition of The Bitcoin Layer newsletter.

"The Fed's aggressive rate hikes and balance sheet reduction have caused a historic bank failure – fashioning a real-time ad for Bitcoin self-custody," Bhatia and Consorti added.

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