$920B is the number to watch now that crypto’s trillion dollar total market cap is gone

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Big round numbers always attract investor interest and the $1 trillion total crypto market capitalization is no exception. After a 16-hour negative 8.6% move, the indicator fell to $914 billion, his lowest level since January 13.

Concerns about the stability of the U.S. banking industry, particularly the collapse and subsequent closure of Silvergate Bank (SI) on March 8 and the closure of Silicon Valley Bank (SVB) on March 10 by the California Department of Financial Protection and Innovation is one of the reasons we fell short of the $1 trillion capitalization support. Silvergate was the go-to fiat gateway network for the most important cryptocurrency exchanges and intermediaries.

The California Department of Financial Protection and Innovation did not provide an explanation for the closure of SVB Bank. Nonetheless, the financial institution says he will be the first of his FDIC-insured to fail in 2023.

Silicon Valley Bank has over $200 billion in assets and provides financial services to many crypto-focused ventures, including Andreessen Horowitz and Sequoia Capital.

However, let’s not forget the continued efforts by the US Federal Reserve to keep inflation in check, including raising interest rates above 2% in August 2022 and shrinking the balance sheet through asset sales. please On top of this, U.S. labor market data released on March 10 revealed that 311,000 jobs were created in February 2023, meaning the Fed’s anti-economic It supports the idea that firepower is necessary.

An unexpected consequence of the central bank’s cautious stance is that the recession is likely to be longer and more severe. The inverted bond curve reached its highest level in his 40 years as investors demanded higher returns for 2-year Treasuries than for longer-term bonds.

What is the importance of a $920 billion market cap?

There was a notable uptick as total cryptocurrency capital reached $920 billion. This may not seem significant at first, but it points to a significant level of large buyers for the leading cryptocurrency, Bitcoin (BTC). First, we need to understand that, excluding stablecoins, Bitcoin accounts for about half of total crypto capital.

As a result, Bitcoin’s $380 billion market cap underpins a total of $920 billion. There are three reasons why these levels are important from a valuation perspective.

Bitcoin surpasses $380 billion, beating out retail giant Walmart (WMT), international payment processor Mastercard (MA), and high-yield consumer discretionary power Procter & Gamble (PG) It ranks among the top 20 global tradable assets with a value of After such an impressive achievement, it becomes increasingly difficult to find the cause of failure.

Bitcoin fell 50% to $19,650 in 12 months, with performances including Credit Suisse Group (CS) down 63%, First Republic Bank (FRC) down 51% and Warner Bros. (WBD ) and other billion-dollar companies. 43%, Intel Corporation (INTC) 43%.

Finally, it remains the 7th largest global base money relative to fiat currency by maintaining a capitalization of $380 billion. For example, the Australian dollar (AUD) has a currency supply of $378 billion, while the Canadian dollar (CAD) has a currency supply of $220 billion. With a monetary base of $500 billion, the Indian Rupee is the next potential target.

At the moment, options put/call ratios are stable

Traders can gauge overall market sentiment by measuring whether more activity is taking place via call (buy) or put (sell) options. Generally speaking, call options are used for bullish strategies and put options are used for bearish strategies.

A put-to-call ratio of 0.70 indicates that open interest in put options is bullish, lagging behind more call options. In contrast, the 1.40 indicator favors put options, which is a bearish sign.

Related: South Dakota Government Rejects Bill to Exclude Cryptocurrencies from the Definition of “Money”‘

Since March 8th, demand for protective puts has increased, indicating risk aversion for derivatives traders. Aside from a brief overshoot on March 9 when the put-to-call ratio crossed 1.50, this move coincided with Bitcoin’s price dip below $22,000, so nothing out of the ordinary. was.

The gap in favor of put option risk indicators is closing, and even professional traders are showing that the crypto market continues to drop to new lows.

More importantly, there are no signs of stress in the Bitcoin options market. This is encouraging given the heavy pressure from the banking sector and the prospect of a contracting economy.