Retailers accumulating bitcoin at the fastest pace since FTX…
Onchain data shows that retailers have been accumulating bitcoin (BTC) at the fastest pace since the collapse of FTX, a cryptocurrency exchange.
Retailers accumulating bitcoin
Glassnode shows that “shrimps”, that is, small-scale retail holders with between 0.1 BTC and 1 BTC, ramped up their buying activity this week amid concerns of a banking collapse in the United States.
Following the bank run of Silicon Valley Bank (SVB), the bankruptcy of Silvergate, and the closure of Signature Bank, there were fears that the markets would collapse if the government and the Federal Reserve would have failed to step in. These effects, analysts predicted, would have significantly impacted the financial markets, including crypto and bitcoin.
The United States Treasury Department, through Janet Yellen, said it would intervene and bail out depositors in affected banks. Meanwhile, the Federal Reserve said it would set out a funding program and a loan facility for distressed banks to withdraw. This subsequently saw the Federal Reserve’s total asset increase by $397b in the last week alone, partly unwinding their tightening efforts.
BTC rallying above $27,000
Although the USDC, a stablecoin tracking the USD, briefly de-pegged after Circle, the issuer, said it was exposed to SVB; it restored its parity on Monday, March 13, after the chaos of the weekend. This also coincided with the expansion of bitcoin and crypto prices.
As of March 13, BTC prices pushed above $24,000 before bulls stepped on, driving prices to new Q1 2023 highs at over $27,000 at spot rates.
When writing, trackers reveal that BTC is changing hands at $27,464, up 35% in the last trading week.
The expansion in the number of retailers accumulating bitcoin could suggest that users see the coin as an alternative, especially during the current banking crisis.
Bitcoin is designed to be censorship-resistant, global, and digital. Its limited total supply of 21m means the coin is deflationary. Accordingly, over the years, proponents maintain that BTC can serve as a medium of exchange, like money, or a store of value, like gold, especially in a crisis.