The U.S. Federal Reserve has increased its balance sheet by almost $100 billion this week, reaching a total of $400 billion. The central bank continues to print more money in order to rescue cash-strapped banks that have suffered since the collapse of Silvergate, Silicon Valley Bank, and Signature Bank. As a result of this development, Bitcoin and Ethereum prices have soared, with the crypto fear and greed index rising to 61.
US Banks have borrowed $163.9 billion from the U.S. Federal Reserve, compared with $164.8 billion in the previous week. Borrowing rates by banks have increased after the Fed raised interest rates by another 25 bps to 4.75%-5%. Additionally, US Treasury Secretary Janet Yellen announced that there would be no blanket insurance for all bank deposits.
Some notable names in the finance industry, including Tesla CEO Elon Musk, billionaire Bill Ackman, former Coinbase CTO Balaji Srinivasan, and Ark Invest CEO Cathie Wood, have criticized the U.S. Federal Reserve’s rate hikes amid the banking crisis.
On the other hand, Bitcoin’s price has risen by 2% over the past 24 hours, currently trading near $28,100. The 24-hour low and high are $27,359 and $28,729, respectively. While the BTC price has increased, the trading volume has decreased in the last 24 hours.
On-chain analysis and sentiment analysis have shown that the Coinbase Premium Index is decreasing, while the Korea Premium Index is increasing. High premium values indicate strong buying pressure from U.S. and Korean investors. However, the current scenario signals a more balanced price momentum.
Moreover, four on-chain metrics have revealed the potential of a correction in the BTC price before more upside moves can occur in the coming days as positive sentiment rises. Analysts believe that Bitcoin has the potential to hit $35,000 amid the banking crisis.
Meanwhile, Ethereum’s price is also witnessing an upside move, with ETH rising by 3% in the last 24 hours amid bullish sentiment. The price of ETH is trading at $1,710, with a 24-hour high of $1,853. Ethereum’s price is expected to be volatile amid high gas fees and the Shanghai upgrade set for April 12.
In light of these events, Binance CEO “CZ” and Nic Carter spoke about the repercussions of Operation Choke Point 2.0. Operation Choke Point was initially launched by the Department of Justice under the Obama administration to combat illegal practices conducted by banks and other financial institutions. However, it also involved limiting access to banking services for certain companies, especially in the cryptocurrency sector. This has led to calls for clearer regulations and guidelines to be put in place to prevent such actions from occurring again in the future.
Overall, the current situation in the finance industry is characterized by uncertainty and volatility. While the U.S. Federal Reserve’s measures to rescue banks affected by the Covid-19 pandemic have led to a surge in Bitcoin and Ethereum prices, many investors and industry leaders remain wary of the potential long-term consequences of these actions. As such, it is crucial for all stakeholders to remain vigilant and proactive in navigating the evolving landscape of global finance.
