The US Federal Reserve’s recent announcement of a $300 billion printing plan for banks has triggered expectations of a price surge for Bitcoin and Ethereum, as investors brace themselves for a potential rally in the crypto market.
US Banks Borrow $164.8 Billion from Federal Reserve as Emergency Funding Continues
In a bid to rescue cash-strapped banks since the recent collapses of Silicon Valley Bank and Signature Bank, the US Federal Reserve has increased its balance sheet by $300 billion through a new money-printing initiative. The announcement has generated optimism among investors and led to a surge in Bitcoin and Ethereum prices, fueling a generally bullish sentiment in the broader crypto market.
The spike in borrowing at the Fed’s discount window highlights the severe cash flow issues being faced by US banks in the wake of the recent bank collapses. The $300 billion money printing by the US Federal Reserve is expected to ease the pressure on cash-strapped banks, and the emergency facility will help these banks meet their short-term funding needs.
The rise in borrowing at the Fed’s discount window from $4.58 billion to $152.9 billion as of March 15 is the highest since the 2008 financial crisis when it hit $111 billion. As a result of the US Federal Reserve’s action, Bitcoin and Ethereum prices have rallied and the broader crypto market sentiment has turned bullish.
Heavy Bull Run Prediction Ensues
Additionally, in an effort to prevent bank runs after the failure of Silicon Valley Bank, the Federal Reserve provided an extra $11.9 billion to U.S. banks through the new emergency Bank Term Funding Program. Furthermore, federal regulators or agencies received $142.8 billion to manage the two banks.
In response to this, Cameron Winklevoss, co-founder of the Gemini crypto exchange, expressed increased optimism towards Bitcoin as the balance sheet of the U.S. Federal Reserve has now risen by $300 billion.
In a recent statement, Arthur Hayes, co-founder of BitMEX, expressed concerns about the deeper crisis that US banks are currently facing, with bond portfolios that are reportedly $2.2 trillion underwater. This has raised concerns about the risks of US debt default and recession. However, Hayes also believes that those who can trade this situation correctly could stand to benefit greatly from a profitable crypto bull market.
Bitcoin at the time of writing is trading at $26,068.96, almost 6% up in the past day and the cryptocurrency still maintains 45% dominance of the crypto market. Ethereum in a similar vein is up almost 4% trading at $1,716, over 22% gain in the past one week.
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