Decentral Block Post

Bitcoin (BTC) reclaimed $29,000 overnight into May 4 as the United States banking crisis risked spawning new victims.

Gold, Bitcoin benefit from U.S. banking mayhem

Data from Cointelegraph Markets Pro and TradingView tracked a swift mood change for BTC/USD, which hit $29,242 on Bitstamp.

The pair had sunk to daily lows at the previous day’s Wall Street open as markets awaited the Federal Reserve’s decision on interest rates.

At the same time, more U.S. regional bank stocks were suffering, with the trend remaining as the Fed confirmed its much-anticipated 0.25% hike.

One lender, PacWest Bancorp, reportedly announced that it was considering a buyout, pressuring the regional bank sector even further while boosting havens, including Bitcoin.

Decentralized finance (DeFi) protocol Curve Finance has launched its native algorithmic U.S. dollar-pegged stablecoin, dubbed “crvUSD” on the Ethereum mainnet — minting more than $22 million worth of the crvUSD so far.

According to data from blockchain explorer Etherscan, the contract has minted more than $22 million worth of crvUSD in the past 8 hours, with $20 million of that amount minted within the first 5 minutes.

The deployment of crvUSD on the Ethereum network is a significant step towards the public release of the algorithmic stablecoin. Notably, the stablecoin remains inaccessible to general users, pending integration with Curve’s front-end user interface on its official website.

Responding to a query about when users could expect to see the stablecoin released to the public in the official Curve Finance Telegram chat, an admin claimed it will be coming “soon.”

At the time of publication, Curve Finance is one of the largest DeFi protocols in the industry, with roughly $4.4 billion in total value locked (TVL), according to data from DeFiLlama.

The Bitcoin (BTC) price has successfully defended the $28,000 support on May 2, but has yet to prove the strength needed to reclaim the $29,200 level from April 30.

$30K becomes crucial for Bitcoin bulls

Some analysts will pin the recent downtrend to the expectation of an interest rate increase by the U.S. Federal Reserve (Fed) on May 3, but in reality, the market is pricing 92% odds of a modest 25 basis point increase to its highest level since September 2007.

As the market intelligence platform Decentrader pointed out, the comments from Fed chairman Jerome Powell are more likely to bring surprise elements, either pointing to further measures to slow down the economy or signaling higher odds of the terminal interest rate being close to 5%. Powell is set to hold a press conference at 2:30 p.m. ET.

From an employment perspective, the central bank has reason to believe that the market continues to overheat. The U.S. government reported 1.6 job openings for every unemployed worker in March. Moreover, according to the ADP National Employment report released on May 3, private payrolls increased by 296,000 jobs in April, well above the 148,000 market consensus.

However, raising interest rates has negative consequences for families and small businesses, in particular. Financing and mortgages become more costly, while investing in fixed income becomes more attractive. Such an undesired effect of curbing inflation could further shake the core of the financial system, as shown by the latest bank failure of First Republic Bank.