Following a negative market movement in the previous weeks, bitcoin’s price is back in the green for the past couple of days.
The asset reached its lowest point since before January’s rally, trading as low as $19,843 on March 3rd.
During that period, the cryptocurrency market was suffering the effects of the collapse of relevant banks like Signature and Silicon Valley Bank.
However, as the market was already bracing for the impact of yet another major crisis, the USA Government regulators pledged to fully secure the resources of all depositors following the collapse of Silicon Valley Bank (SVB) on Friday (10), while the bank’s UK branch was sold to HSBC this morning.
As a result, bitcoin surged by 22%, breaking through several resistance lines. $BTC is currently valued at $24,157—its highest price since February 21st. The daily trading volume also surged by 39%, going from about $30 billion last week to over $51 billion at this time of writing.
USA Government Backs Bankrupt Banks
In a press release on Sunday, the Fed noted that it will provide additional funding to depository institutions through the new Bank Term Funding Program (BTFP).
The program will offer loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, as well as other eligible assets, as collateral.
Subject to approval by the Treasury Secretary, the Department of the Treasury will provide up to $25 billion from the Exchange Stabilization Fund as a safety net for the BTFP.
To reinforce these claims, President Joe Biden also spoke about this issue. The 46th POTUS claimed that the government is ready to “do whatever is needed,” in order to bailout the U.S. banking system.
“Every American should feel confident that their deposits will be there if and when they need them.” The President also said during his speech.
Moreover, Biden also guaranteed that the funding for the bailout will not come from taxpayer money— but instead the fund is said to come from banking fees distributed to the Deposit Insurance Fund.