According to real-time app data provider Apptopia, the top 10 crypto applications for exchanges and self-custody wallets have risen by about 15% since Silicon Valley Bank (SVB) and two other lenders fell last week.
Bank App Demand Drops
The recent shake-up in the United States banking system appears to shift interest and demand toward crypto solutions. Trackers note that since last week’s crisis, there has been a remarkable increase in downloads of crypto dapps offering exchanging and asset storage services.
According to Apptopia, the top 10 crypto apps, defined as Coinbase, Crypto.com, Trust, Binance, Bitcoin and Crypto DeFi Wallet, Blockchain.com, KuKoin, Kraken, eToro and BitPay, comprising both exchanges and self-custody wallets, have risen by around 15% since Silicon Valley Bank’s stock fell 60% last week.
crypto app downloads and the price of bitcoin go up 15% in the week after SVB collapse.@TechCrunch with the story behind the numbers: https://t.co/rvJX09ULph
— Apptopia (@Apptopia) March 16, 2023
This starkly contrasts the top 10 traditional banks and top 10 “digital-first” bank app downloads, which have fallen by around 5% and 3%, respectively, over the same period.
Last week, Silvergate Capital, Silicon Valley Bank, and Signature Bank shut down or halted operations, leading to crypto companies, investors, and traditional users scrambling to move their assets. Last week’s events significantly impacted Circle, the issuer of USDC, a stablecoin.
The circumstances surrounding the collapse of these banks raised questions about where people and companies should park assets and which entities are trustworthy. Amid this development, crypto assets rose as the United States government and the Federal Reserve (Fed) intervened to prevent an extension of the crisis.
Bitcoin and Ethereum, two of the largest cryptocurrencies by market capitalization, have posted impressive gains this week. BTC is trading above $26,000 and remains the most dominant crypto asset.
The expansion in asset prices has seen the global crypto market cap rise by 8.3% to about $1.1 trillion when writing on March 17, according to CoinMarketCap data.
Fear Driving Crypto Prices
The banking crisis in the United States puts midsize and regional banks, like First Republic, under pressure. According to Reuters, First Republic had the third-highest rate of uninsured U.S. deposits behind SVB and Signature Bank, at about $119.5 billion.
The top 10 traditional banking apps saw a 5% download decline. Interest fell in banking apps like Capital One, Chase, Bank of America, Wells Fargo, Discover, Citi, and U.S. Bank.
Meanwhile, the top 10 “digital-first” apps posted a 3% decline as app users lost interest in, among other apps, Chime, Dave, Albert, Empower, Varo, MoneyLion, Current, Aspiration, Sable, and Oxygen.
According to Stefan Rust, CEO of Truflation, the current shift in investor sentiment towards cryptocurrencies is positive and unexpectedly supported asset prices. He believes the situation is similar to what happened in 2020 when investors fled traditional markets during the COVID-19 pandemic in favor of alternative assets.
Feature Image From Canva, Chart From TradingView.