• Signature Bank, the last major digital currency bank in the U.S., has closed. This follows the closure of Silvergate and Silicon Valley Bank.
• Many USDC units were stored in Signature, which caused USDC to lose their dollar peg for a period of time.
• Despite this financial turbulence, Bitcoin is still doing well.
Signature Bank Closure
Another major bank has closed its doors: crypto institution Signature Bank, which was the last major digital currency bank in the U.S. This follows the closures of Silvergate and Silicon Valley Bank over the course of a few weeks.
USDC Impacted by Closure
Many of Circle’s reserves were stored in Signature, which caused USDC to lose its dollar peg temporarily when Signature shut down mid-March. USDC is normally pegged to the USD; $1 USD is worth $1 USD in USDC tokens. The asset eventually regained its peg but there was much concern expressed over the incident as it had long been one of the most stable digital assets available worldwide.
Experts Weigh In
Economist and writer Noelle Acheson explained that with slower hiking rates and more liquidity being pumped into banks struggling to meet withdrawals, volatility could be partially offset by higher market liquidity – particularly with Bitcoin being so sensitive to market liquidity due to its lack of earnings or ratings concerns. Sylvia Jablonski – CEO and chief investment officer of Defiance ETFs – commented that both banks had little diversification, making them high risk/high reward investments that could take some time for startups and venture capitalists to recover from if things went south quickly due to a lack of Fed backstop or rate hikes occurring at once.
Bitcoin Doing Well
Despite all this financial turbulence taking hold recently, Bitcoin has been doing quite well overall and is up at press time despite initial panic setting in when news broke about these banks closing down one after another..
The closure of yet another major crypto bank highlights just how volatile this space can be even with seemingly “stable” currencies like USDC around; however, Bitcoin continues to do surprisingly well despite all this turmoil occurring simultaneously on multiple fronts.