The crypto markets are resurging after a dramatic period seen this week come to an end. However, the wider market is suffering serious blows. The industry is shivering as it has experienced disarray of the highest order.
It started with Silvergate, then came Silicon Valley Bank, and recently Signature Bank was in chaos. On Monday alone, Bitcoin had an upsurge of 18% to over $24,200 daily. There was also a double figure increase seen in Ether and ADA.
Exchanges Experience Historic Fund Outflow; Contagion Risk Remains at Bay
The US government had promised the people who had put their money in the bank that shut would get their money back. Nevertheless, the investors will lose their money because they were taking a risk, and in such situations, you either gain or lose.
The news made the crypto industry happy, increasing the price of cryptocurrencies. Prices will likely fluctuate because some people find it difficult to move their money around. The mayhem that resulted from the downfall of the tech banks shocked crypto traders last week.
CoinShare reports that financiers withdrew a huge amount of money. It was the biggest weekly withdrawal ever noted since the start of the year. An outflow of more than $250 million was recorded.
A 10% decrease in assets under management (AUM) resulted in a $26 billion total AUM. CoinShare monitors the inflow and outflow of funds in products linked to digital currencies. Bitcoin funds suffered the most, with $244 million withdrawn.
Ethereum and altcoins recorded outflows but to a lesser degree. Solana, XRP, Polygon, and multi-asset funds recorded only a $3 million inflow in a week.
Confidence in Crypto and Blockchain Technology Remains High
Capital Hill’s latest study reveals that there is still strong confidence in cryptocurrencies despite the chaos being experienced in the industry. The analysis reports that 75% of traders are still confident with digital currencies.
It further states that 72% of respondents are not troubled by the sharp price movements experienced last year. Moreover, 89% of buyers have confidence in mobile apps, crypto exchanges, and banks to keep their cryptocurrencies.
The study was done before the latest market confusion. The results show that the public’s view on digital currencies is stronger than anticipated. Although the latest market tremor impacted the banking industry, the effect of cryptos was not the main area of attention for many people. The cryptocurrency was just a minor aspect.
Compared to when FTX crumbled last November, the current happenings are not likely to attract attention worldwide. However, Silvergate’s connection to FTX discloses that the effects of FTX’s downfall are still present and noteworthy.
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