The U.S. government’s actions to support Silicon Valley Bank (NASDAQ:SIVB) depositors has caused a dramatic spike in the value of major cryptocurrencies such as Bitcoin (CRYPTO: BTC), Ether (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE), with the collective market capitalization breaking the $1 trillion ceiling.
This morning, Bitcoin breached the $23,500 mark and reached $24,000 at the time of writing.
Ether is currently priced at $1652, up 13%, while Binance Coin (CRYPTO: BNB) is up over 13%, Cardano (CRYPTO: ADA) is trading up 14% and Dogecoin is up over 10%
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Market participants and industry experts surmise that the surge in cryptocurrency prices reflects the increasing correlation between the broader financial market and digital currencies.
They suggest that this correlation is expected, given the effects of hundreds of billions of dollars being injected, where investors seek out safer havens, such as gold or cryptocurrencies, in these situations.
However, they acknowledge that this event cannot be seen as a single factor to infer the correlation between cryptocurrencies and the larger financial market.
Commenting on the correlation, Edul Patel, the co-founder, and CEO of Mudrex told Benzinga that investors gravitate towards the safest haven in times of market distress, such as gold.
Read: CZ Speculates On Government Plot To Take Down Banks; Circle Responds To SVB Fall
He continued by saying that reduced volatility can be expected as the asset class matures.
Robert Quartly-Janeiro, the Chief Strategy Officer at Bitrue, stated that the bailout serves as a lifeline for the technology and VC space, averting a capital and lending crisis which would have adversely affected new technologies with utility following the SVB issues.
He noted that the global nature of cryptocurrency trading makes it both correlated and uncorrelated, depending on the level of investor reactions.
Marius Grigoras, the CEO of Bhero, welcomed the surge in the cryptocurrency market and highlighted that it provides a significant opportunity to offer a more diversified investment portfolio for both cryptocurrency and traditional investors.
He
