In the past few days, the crypto market has seen a surprising surge, with bitcoin and ether rising around 20% since Sunday.
Despite awave of bank failures suggesting a challenging road ahead for the economy, there has been a positive response from asset markets, reflecting the current "bad news is good news" environment. However, the markets may be overlooking a specific provision of the Fed's recent bank bailouts called the Bank Term Funding Program (BTFP), which could make it easier for the Fed to increase interest rates. While the emergency declaration of Silicon Valley Bank (SVB) and Signature Bank as "systemically important" suspended normal FDIC rules and avoided some short-term turmoil, it remains to be seen whether the rescue of Signature Bank is good news for crypto, as it had some clients in the sector. The stock markets are down on Wednesday morning as banking woes expand to Europe, but the Dow Jones Industrial Average was up over 1% between Monday and Tuesday's close.