Cryptocurrency Projects Raise $4 Million Despite US Banking Crisis
Despite the growing concerns in the US banking industry, the cryptocurrency industry is holding firm, raising more than $4 million through token sales last week.
On March 19, CryptoRank data revealed that despite the downturn, the amount raised has increased exponentially; Demonstrate flexibility and adaptability in the cryptocurrency industry.
The collapse of major US banks is affecting the cryptocurrency industry
The data showed that the cryptocurrency industry raised $4.11 million through token sales, despite the decline in token sales in the previous month.
Total raised in the past two months was $6.89 billion, up from $933.55 million last month, including private tours.
This comes against the backdrop of the collapse of major banks Silvergate, Silicon Valley Bank (SVB), and Signature Bank, which have exposed the vulnerability of the traditional banking sector while temporarily depriving the US cryptocurrency market of fundamental slopes.
Analysts attributed the collapse of SVB and Silvergate to unfavorable market conditions and poor risk management. The SVB’s fall resulted from overexposure to long-term government bonds, which fell in value when interest rates rose. This left the bank short of assets when many depositors withdrew their money simultaneously.
Silvergate’s collapse was driven by the collapse of FTX, which hurt confidence in the crypto sector, and short sellers raised their concerns on Twitter.
The closure of Signature Bank sparked controversy as it was reportedly not insolvent and had already stabilized the outflow of capital when US regulators intervened. Many cryptocurrency enthusiasts saw this as a politically motivated move to get cryptocurrency out of the United States
With the collapse of Silvergate and Signature Bank, the two main financial institutions providing banking services to US crypto companies, it was widely believed that crypto companies would face significant hurdles in engaging with the dollar-based financial system. However, recent fundraising success suggests otherwise.
Fundraising methods: ICOs, IEOs, and IDOs
Initial coin offerings (ICOs), initial exchange offerings (IEOs), and initial decentralized offerings (IDOs) are methods of fundraising that differ in structure and execution but share similar goals.
ICOs enable companies to raise money by creating new currencies, apps, or services. IEOs include online trading exchange platforms that place offerings of digital assets on behalf of companies, providing instant trading opportunities. IDOs, the latest fundraising model, offer enhanced liquidity and are issued via decentralized exchanges.
Bitcoin (BTC), the world’s largest cryptocurrency, has had a turbulent ride, reaching an all-time high of around $69,000 in November 2021 before dropping below $20,000 in March 2023.
Despite the banking crisis, bitcoin is on the rise again, trading at around $27,740 at the time of writing. CryptoRank.io data indicates that Binance leads the Bitcoin and Ethereum markets in daily futures volumes.
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