Bitcoin, the world’s largest cryptocurrency by market capitalization, rose 36.06% in the week from March 10 to March 17, to trade at US$26,795 at 7:00 p.m. on Friday in Hong Kong. Ether rose 26.67% in the same period to US$1,750.

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However, equity markets had a turbulent (understatement) week due to fears that cracks were appearing in the U.S. banking system

It started the week prior when Silvergate Bank went into voluntary liquidation after a bank run and its shares plunged. Regulators then quickly shut down Silicon Valley Bank (SVB) and Signature Bank, two major lenders to the technology and crypto industries, to avoid panic and the risk of a systemic bank failure.

It was serious enough that U.S. Treasury Secretary Janet Yellen contacted the White House on the weekend of March 11 to get approval from President Joe Biden to initiate the takeovers. Treasury then put out a joint statement with fellow heavyweights, the Federal Reserve and Federal Deposit Insurance Corporation, assuring they would provide a backstop for U.S. banks. 

Biden repeated the same message during the week as traders drove down the shares of other U.S. regional banks. The focus shifted to Europe when global investment bank Credit Suisse started to wobble, prompting a US$54 billion lifeline from the Swiss National Bank. On the U.S. side, 11 financial institutions had to step up to inject US$30 billion into First Republic Bank after its share price tanked.

Wrong focus?

Despite the spreading woes in the banking industry, Bitcoin remained resilient and only briefly fell to US$19,654 on March 10, before reclaiming the US$20,000 level the next day and then moving higher through the week.

“While the U.S. banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat,” tweeted Cathie Wood, the founder and chief executive officer of investment management giant Ark Invest.

Amid recent regulatory crackdowns on crypto platforms, Wood seemingly could not resist driving home the point:

“Instead of blocking decentralized, transparent, auditable and well-functioning financial platforms with no central points of failure, regulators should have been focused on the centralized and opaque points of failure looming in the traditional banking system.”


James Wo, the founder and chief executive officer of crypto investment firm DFG, shares Wood’s sentiment.

“The market’s confidence in traditional finance was dented, leading to a shift of funds to the crypto market,” wrote Wo, in a LinkedIn response. Bitcoin “has shown its superior risk and inflation resistance as an alternative asset, and will be further recognized by the mainstream,” he said.

Bitcoin then rose above the US$26,000 mark on Tuesday after the release of the U.S. Consumer Price Index (CPI), which indicated a drop in the annual inflation rate to 6% in February.

However, Jamie Douglas Coutts, senior market structure analyst at Bloomberg Intelligence, said Bitcoin’s rally was really driven by the earthquake in U.S. banking, not the CPI reading.

“Bitcoin has been strongly bid since last Friday when it became clear the U.S. banking system was in trouble. The real story is the 25% rally from then. The spike to US$26,000 on the CPI print is noise, because the number came in line with expectations and it quickly fell back below US$25,000 – a level which I believe is critically important from a technical perspective,” wrote Coutts to Forkast.


Slava Demchuk, the co-founder of AMLBot, a developer of crypto anti-money laundering software, attributed Bitcoin’s rally to hedging by investors.

“[Bitcoin’s rally] is not necessarily due to a widespread recognition of the non-custodial potential of digital assets like Bitcoin or Ethereum, but as a means to safeguard against traditional financial systems,” wrote Demchuk.

Bonnie Cheung, head of strategy at Sending Labs, a software firm building Web3 communication protocols, said that the global government interventions will help Bitcoin reach new highs.

“The rapid move by the Swiss government to support Credit Suisse has certainly given the market an olive branch to hold onto for the coming weeks. This, together with the action by the US government, has now set a precedent,” said Cheung.

“The expectation is that governments will not hesitate to swoop in should any major banking crisis start to unfold in the next few weeks. This will further ignite the bullish sentiment and build the narrative to push Bitcoin to test new highs,” wrote Cheung.

The global crypto market capitalization stood at US$1.14 trillion on Friday at 7:00 p.m. in Hong Kong, up 23% from US$923 billion a week ago, according to CoinMarketCap data. Bitcoin’s US$520 billion market cap accounted for 45.2% of the market, while Ether’s US$215 billion accounted for 18.7%.

See related article: Banks are bringing systemic risks to crypto, says Circle’s Disparte

Biggest gainers: CFX, STX rise over 100%

CFX, the utility token of Conflux Network, China’s only public blockchain, was this week’s biggest gainer among the top 100 coins by market capitalization listed on CoinMarketCap. CFX rose 105.99% during the week to trade at US$0.317.

The token started gaining momentum after Conflux announced that KuCoin Ventures invested US$10 million in the protocol. Conflux also introduced CNHC, a CNH stablecoin for cross-border payments.

STX, the native token of Stacks, Bitcoin’s smart contract layer, was the week’s second-biggest gainer, up 100.13% to US$1.09.

The token has seen increased interest after its upcoming hard fork, Stacks 2.1., was announced for March 20. The upgrade aims to create a stronger interconnection between Stacks and Bitcoin by introducing decentralized mining pools, improved bridges and enable compatibility between Stacks-native assets – like Ordinals – and Bitcoin wallets.

Next week: Bitcoin to US$28,000?

“Right now, systemic risk is front and center in the minds of investors,” wrote Coutts. “Whilst this banking crisis seemed to have started in the U.S. the situation in Europe with Deutsche and Credit Suisse has been a slow-moving train crash for years,” he said.

“Short term is not my forte but if we finish with a weekly close above the $25,000 then I would have to adjust my model regime to bullish as that would signal we have completed a bottoming process which started in mid-2022 and a new bull cycle is underway,” added Coutts.

DFG’s Wo said macroeconomic trends in the U.S., upcoming interest rate hikes, and the global banking woes will remain the main determinants of traditional and crypto markets in the coming weeks.

Kadan Stadelmann, chief technical officer of blockchain infrastructure development firm Komodo, said the fragile economic landscape in the U.S. is currently the main driver of Bitcoin prices.

“The Federal Reserve embarked upon a many-trillion dollar quantitative easing program, cut the minimum bank reserves from 10% to 0% on March 26, 2020, and led us into the current bout with inflation, which has led people to seek alternative ways to preserve wealth. Bitcoin has become a prominent option,“ wrote Stadelmann.

“Bitcoin won’t see any resistance until the US$30,000 level for now. If a systemically important bank such as Credit Suisse collapses, it could bring the market down to US$9,000-13,000,” he said.  

“In 2020, when markets collapsed, Bitcoin was among the first commodities to rebound. Bitcoin is still well off its all-time highs and could quickly double to retake its old highs, especially if the Fed reverses course and embarks upon another quantitative easing program,” said Stadelmann.

Mayank Shekhar, co-founder and chief technology officer of play-to-earn game One World Nation, said Bitcoin is being increasingly perceived as a store of value and he expects it to trade between US$24,000-27,000 next week in the run up to the Fed meeting on interest rates on March 21 and 22.

Aziz Kenjaev, head of partnerships at decentralized crypto exchange GammaX Exchange, expects the crypto market to cool before the Fed’s interest rate decision.

“The Fed is expected to raise rates by 25 basis points, any number above this projection will act as a strong bearish sentiment for the U.S. dollar, and a strong bullish sentiment for Bitcoin. In this regard, I’m expecting Bitcoin to reach US$28,100 next week.”

(Updates to trim repetition, add sub-heads.)