Bitcoin News - American multinational investment firm Goldman Sachs predicts no longer interest rate hikes.
- Silicon Valley Bank collapse gave shockwaves in the crypto industry.
While the global economy buzzed by the sudden collapse of the U.S. second-largest bank, Silicon Valley Bank (SVB), Goldman Sachs analysts predicted that they “no longer expect an interest rate hike” at March 22 meeting. In the past, Goldman Sachs reportedly predicted that Fed’s interest rates would increase by 25 basis points at the meeting in March.
Traders slammed shut once again less than a week after Federal Reserve Chair Jerome Powell signaled to boost interest rate increases due to the sudden appearance of financial stresses in the US regional banks. However, Goldman Sachs’s prediction change is the result of current stress in the banking industry, which has created a great deal of uncertainty regarding the path of rate hikes after March.
Also, the possibility of a banking crisis highlights the conflict between the Fed’s efforts to slow the economy and control inflation and growing worries that raising interest rates by 4.5 percentage points in a year could lead to a recession and a sell-off of riskier assets.
SVB Collapse Impact on Crypto Industry
On Friday, Silicon Valley Bank was shut down by New York regulators. SVB’s collapse in the U.S. is the largest since 2008. That resulted in USDC’s price, which depegged from its standard $1 to as low as $0.87 on 11th March, due to its company Circle, which kept $3.3 billion in USDC reserves at Silicon Valley Bank.
Additionally, New York regulators shut down another significant Crypto-friendly Signature Bank, which had $88.59 billion in deposits as of December 31, 2022. Also, prominent cryptocurrency exchange Coinbase was impacted by the government action against the Signature Bank, as per its official Twitter announcement. And the exchange holds $250 million at Signature Bank.
Further, the government declared it would recover SVB’s client’s fund but refused a bailout of the firm. As a result of this, the global crypto market signs a slight recovery. At the time of writing, Bitcoin traded at $22,164 and surged over 9% in the last 24 hours. Also, the global market cap gained its $1 trillion mark.
Recommended for you
