Since then, almost any meaningful headline has been shrugged off as unimportant. In the face of bank instability, the ongoing war between Russia and Ukraine, a 25-basis-point rate hike in May, a looming global recession and the U.S. debt-ceiling fight (that may or may not be resolved), digital assets (and equities) have seemingly lost interest in all conventional narratives that would normally spark a reaction from investors.
On March 8, rumors of trouble at SVB caused digital assets to become entangled in the situation. The announcement that $3.3 billion of Circle’s dollar-backed USDC stablecoin was held at SVB caused the stablecoin to depeg from the U.S. dollar.This led to digital asset investors selling positions on major exchanges. Bitcoin dropped from 22,410 to 19,500, and ether slipped almost 200 points from 1,560 to 1,368, breaking below its 200-day moving average momentarily before recovering.