What the numbers say:;Bitcoin (BTC) retreated to;two-month lows;on May 12, returning to the $26,000 level for the first time since March 18. The largest cryptocurrency by market cap has failed to react to the latest banking turmoil triggered by the collapse of First Republic Bank with an upward trend. The second-largest cryptocurrency,;Ether (ETH), also showed a similar downward trend by retreating to the six-week lows after touching $1,741 within the day. The popular cryptocurrency;surpassed the $2,000;level following the Shanghai upgrade on April 13 for the first time since August 2022.
Relevance:;Bitcoin and Ether initially reacted to the U.S. banking crisis, which led investors to lose confidence in the traditional financial system, with a price increase. The turmoil started in March after the consecutive collapses of crypto-friendly Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank within just a week. In early April, Bitcoin surpassed;the $30,000 barrier;for the first time since June 2022 after a steady increase triggered by the banking crisis. However, rising concerns about the multi-sectoral contagion effect of the crisis have prevented the largest cryptocurrency from showing the same reaction to the ongoing collapses.
Brands that should care:&;When the U.S. banking crisis first broke out in March, many crypto-related firms, including Paxos, Coinbase, Circle, Crypto.com, and Kraken, experienced minimal to significant effects since they used certain services of collapsed banking giants. Some of these firms had to cut ties with the related banks to minimize their exposure to the collapse.