The total cryptocurrency market cap has grown by more than 30% in seven days, reaching $1.22 trillion on March 18. Bitcoin was the biggest gainer in the top 20, up 36.1%, although some altcoins rose 50% or more during the period.
Total cryptocurrency market capitalization | Source: CoinGecko
Cryptocurrency prices soared as the Federal Reserve (Fed) was forced to lend $300 billion to banks from its emergency fund. Of that, nearly half went to bankrupt financial institutions Silicon Valley Bank, Signature Bank, to pay uninsured depositors. The remaining $153 billion was obtained through a long-standing program called the “discount window,” which allows banks to borrow funds for up to 90 days.
According to the socially active billionaire investor Bill Ackermaninjecting additional funds into the FDIC and using Fed resources to facilitate credit while seemingly protecting the banking sector ended up creating a “false sense of trust.”
Hedge fund manager Pershing Square’s Ackman said US regulators’ $30 billion plan to avoid a massive liquidity crunch at First Republic Bank “raises more questions than answers”. Moreover, Ackerman pointed out, “when there is a crisis of confidence, half-measures do not work”.
Billionaire Warren Buffett is on the losing side
Warren Buffett, the co-founder and largest shareholder of Berkshire Hathaway, a $650 billion financial conglomerate, has seen his stake drop rapidly as the banking crisis worsens. For example, Berkshire Hathaway is the largest shareholder in Bank of America stock, which is down 15.5% year-to-date. That position alone has cost Buffett $5.2 billion.
A well-known crypto critic, Buffett has declared that he is not interested in Bitcoin even though the entire float is selling for $1,300. The 91-year-old investor, who has a net worth of about $102 billion, insists that bitcoin will not generate anything, while farmland and residential real estate will.
However, bitcoin prices rose 31.5 percent in the six months to March 17, while Berkshire shares rose 5.8 percent. So now, the so-called “rat poison” that Buffett once described as bitcoin is taking over his financial management firm.
Market Cap Quickly Recovers to $1 Trillion
Let’s take a look at the performance of the top 80 cryptocurrencies by market capitalization to see if breaking the $1 trillion mark will boost altcoin investor confidence.
Top 80 weekly winners and losers | Source: Messari
Conflux’s CFX surged 97.6% after KuCoin Ventures announced a $10 million investment in stablecoin issuer and blockchain-based payment service provider CNHC, which currently operates on Ethereum and the Conflux network.
Stacks STX is up 75.7% as the network is scheduled to upgrade on March 20 to introduce Stacks 2.1 with new features and improvements.
Immutable X’s IMX post-production increased by 71.7% notify The highly anticipated upcoming partnership will be revealed on March 20th.
Options traders are very confident about market conditions
Traders can gauge market sentiment with calls or puts to gauge whether there is more activity. Generally speaking, calls are used for bullish strategies, while puts are used for bearish strategies.
A put ratio of 0.7 indicates that the open interest (OI) of puts is slower than that of a large number of calls. Conversely, the 1.4 indicator favors put options, which is a bearish signal.
BTC Options Volume | Put Options Ratio | Source: Laevitas
Demand for neutral to bullish call options has increased since March 12, suggesting that risk appetite among derivatives traders is on the rise. This situation peaked on March 17, when calls volume outpaced coverage put volume by 3:1.
The gap in favor of the call was steady at 2:1, suggesting that professional investors are not worried after a $1.16 trillion market capitalization rejection on March 17. Finally, data shows strong confidence in Bitcoin’s $26,000 support, so bulls are more capable of resuming upward momentum.
- US lawmakers accuse Biden administration of weaponizing chaos to kill cryptocurrencies
- UK to tax cryptocurrency HODL from 2025
- FDIC Bans Crypto-Related Signature Bank Auction Participants
As reported by Cointelegraph