March 27, 2023

The Federal Deposit Insurance Corp. announced late Sunday that First Citizens Bank will acquire the deposits, loans and branches of failed Silicon Valley Bank. Bloomberg had initially reported that a deal was nearing completion and could be announced as early as Monday morning. In a statement, the FDIC said that all depositors of Silicon Valley Bridge Bank, the bridge bank set up by the FDIC after the collapse of Silicon Valley Bank, will automatically become depositors of First Citizens Bank & Trust Co. All deposits assumed by First Citizens Bank, a regional bank based in Raleigh, N.C., will continue to be insured by the FDIC up to the insurance limit. As of March 10, Silicon Valley Bridge Bank reported roughly $167 billion in assets and nearly $119 billion in deposits. 

(George Rose/Getty Images)

The crypto market managed to hold its ground over the weekend, with bitcoin up 1% over the past 24 hours to about $27,900. The cryptocurrency stayed in a range of between $27,000-$28,000 through the weekend after almost reaching $30,000 earlier last week. Simon Peters, an analyst at trading platform eToro, said in a note Monday morning that a short-term pullback is possible. Ether was down slightly in the past 24 hours to about $1,700. European stocks opened higher on Monday as investors hope for an end to banking volatility. U.S. equity futures also edged higher.

Cathy Wood's Ark Invest bought $12.6 million of Coinbase (COIN) shares on Friday, the second straight day the investment firm purchased the crypto exchange's stock after the company received a Wells Notice from the U.S. Securities and Exchange Commission on March 22, sending the shares tumbling 16% the next day. The stock gained 1.5% on Friday to  $67.83. According to an email sent Friday night, 155,833 shares went to ARK Innovation EFT (ARKK), and 26,395 shares went to ARK Next Generation Internet EFT (ARKW). The Wells Notice was a warning from the SEC that it believes Coinbase violated investor-protection laws and could be a signal that the SEC plans to sue the company.

If there was a bitcoin marketing team, the last month would be as good as it gets for them.

Confidence in banks in the U.S. and Europe has been decimated, and people are scrambling for an alternative to protect their dollars. Enter bitcoin, an asset that was created for entirely this purpose – a truly decentralized form of money that can’t be controlled by any entity.

At first glance, the recent banking crisis seems like the perfect catalyst for a BTC price rally. However, digging a bit deeper into the reasons for the move points us in the direction of liquidity, and more specifically, lack thereof.

While the narrative makes sense and has resulted in a lot of people looking for bitcoin at the exact same time, illiquidity has almost certainly been a strong price propellant.

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