The cryptocurrency market is experiencing a surge in popularity due to the struggles of traditional banking networks. As Silicon Valley Bank recently collapsed, more people are seeking alternative ways to take control of their money and ensure its safety.
Bitcoin, in particular, is surpassing 97.6% of the top 500 publicly traded companies in the U.S. Since March 10th, the price of bitcoin has risen by 37.06%, outperforming the year-to-date returns of 488 S&P companies, including FedEx, Apple, and Amazon.
According to Cryptomaniaks.com, a leading crypto education platform, the price of bitcoin has surged from $20,376.32 to $27,929.17 since March 10th. This means that only 12 companies in the S&P 500 have achieved higher than 35% returns this year to date.
The increase in bitcoin’s price coincides with investors turning to stablecoins for money transfers in the absence of traditional banking networks. Stablecoins are cryptocurrencies whose value is tied to another asset, usually the U.S. dollar.
JPMorgan reports that stablecoin trading volumes have spiked since March 8th when crypto-friendly bank Silvergate announced its voluntary liquidation and wind down of operations. As a result, Tether (USDT) has gained a larger share of the stablecoin market.
The collapse of banking networks like Silvergate, Silicon Valley Bank, and Signature Bank has impacted crypto firms in various ways. Crypto companies with diverse banking partners, such as some exchanges, were less affected. However, it is crucial for the crypto ecosystem to replace the lost banking networks to ensure efficient and secure transfer of fiat currency between market participants, thereby maintaining stability in the stablecoin universe.
Furthermore, the stricter regulatory stance of the U.S. may drive crypto market participants to banking networks in Europe and Asia.
With the ongoing instability of traditional banking networks and the impressive performance of bitcoin, it is no surprise that more and more people are turning to cryptocurrency as a secure and efficient way to handle their finances.