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MicroStrategy and Marathon Digital Lead Bounce for Crypto-Related Stocks
The government's weekend backstop of depositors at failed lenders Silicon Valley Bank and Signature Bank sent bitcoin above $22,000.
Updated Mar 13, 2023, 5:36 p.m. Published Mar 13, 2023, 12:46 p.m.
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Crypto-related stocks are mostly posting modest gains alongside the price of bitcoin (BTC) in premarket action on Monday following government moves on Sunday to stem what was shaping up to be a banking crisis.
The price of bitcoin had plunged to below $20,000 late last week following the failures of crypto-focused Silvergate Bank and Silicon Valley Bank, a bank with many ties to the crypto industry. Silvergate was a relatively small lender, but the collapse of Silicon Valley Bank – the second-largest bank failure in U.S. history – had many going into the weekend worried about systemic contagion.
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A number of government agencies Sunday evening teamed up to protect all depositors at Silicon Valley Bank. At the same time, New York regulators shut down Signature Bank (SBNY) as the federal government promised to protect all depositors. The actions sent U.S. stock index futures higher by more than 1%, though that rally lost steam shortly before the open. At press time, only Nasdaq 100 futures remain in the green, up 0.2%.
On Sunday, bitcoin bounced as high as $22,600. It was recently trading at $22,100. Among crypto-related stock movers Monday morning, MicroStrategy (MSTR), a software company that holds a large amount of bitcoin, rose 5.6%, and bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) were up 5.5% and 2.6%, respectively. Crypto exchange Coinbase (COIN) was down 0.6%.
Read more: Cathie Wood's Ark Invest Buys $22M in Coinbase Shares
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What to know:
- Bithumb admitted that serious internal system flaws led it to mistakenly transfer about $40 billion in bitcoin to customers instead of a planned payout of roughly $428.
- The error briefly caused bitcoin prices on Bithumb to plunge 17 percent, prompted a probe by South Korea's Financial Supervisory Service and exposed gaps in the exchange's asset-matching and account-segregation controls.
- While Bithumb has recovered most of the coins, 1,786 bitcoins sold before accounts were frozen remain missing, intensifying lawmakers' concerns about weak oversight in one of the world's busiest crypto markets.
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