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Bitcoin Rises on Report Government Weighing Plan to Protect All Silicon Valley Bank Depositors
The price of the largest cryptocurrency briefly rose back above $21,500 before giving back some gains.
Updated May 9, 2023, 4:10 a.m. Published Mar 12, 2023, 9:00 p.m.
The price of bitcoin rose above $21,400 after the Washington Post reported U.S. authorities are considering safeguarding uninsured deposits at Silicon Valley Bank should a buyer not be found for the institution, which collapsed last week following a $42 billion bank run.
Roughly 85% of SVB depositors held money in accounts that were not FDIC-insured, meaning that without federal action or an outright purchase of the bank those funds could be irretrievable.
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Seeking to avoid a panic in the financial system, officials at the Treasury Department, Federal Reserve and the Federal Deposit Insurance Corp. discussed safeguarding all uninsured deposits, the newspaper reported, citing three people who spoke on condition of anonymity.
Government action would be a possible fallback position should an ongoing auction for the bank fail to yield an acceptable buyer. Bids were due earlier this afternoon, the Post said, citing two people familiar with the auction.
Without a rescue or purchase, companies that banked at SVB may have difficulty meeting payroll, and checks or wires initiated right before the bank’s collapse may fail. (SVB was CoinDesk's bank.)
The price of bitcoin rose on the news of a possible rescue or purchase, jumping to as high as $21,582.26. In recent trading, the price of the largest cryptocurrency by market cap was at $21,400, up more than 4% in the last 24 hours.
Read more: U.S. Lawmakers Met With Fed, FDIC to Discuss Collapse of Silicon Valley Bank: Source
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