Bitcoin has surged above $22,000 in the wake of news that the US Federal Reserve (Fed) and Treasury Department have taken measures to protect deposits of citizens who deposit their money. The move follows the announcement of the closure of Signature Bank, a major lender to the cryptocurrency industry. The US government has confirmed that citizens depositing with Signature Bank have access to the full amount of their deposit.
Additionally, Silicon Valley Bank (SVB), which lends to startups in the technology sector, has been given the green light by the US government to protect deposits made by its customers. This news has helped push bitcoin’s price up $1,896.75 or 9.20%%, to $22,510.22
Signature Bank is one of the major banks lending to the cryptocurrency industry. Its share price has taken a hit this year, falling by nearly 40% after rival bank Silvergate Capital announced plans to cease operations and sell assets of Silvergate Bank to pay debts.
The closure of Signature Bank comes just a day after the California Department of Finance and Innovation announced the closure of SVB on March 11. The Fed has responded to this by creating a “Bank Term Funding Program,” which is aimed at protecting financial institutions from the impact of the SVB bankruptcy, as well as other types of financial institutions.
Bitcoin has seen a surge in popularity in recent months, with investors flocking to the digital currency as a hedge against inflation and economic uncertainty. The latest news from the US government is likely to further boost its appeal to investors.