- Bitcoin’s price dropped by 4.5%, the lowest recorded since February 15th.
- Crypto bank, Silvergate is said to have contributed to the crypto’s drop after incurring losses from FTX’s collapse.
- Crypto heavyweights speculate that there might be more losses for the crypto industry.
Bitcoin has fallen by 4.5% in the past 24 hours, dropping from $23,500 to $22,259, the lowest in two weeks, according to data from CoinGecko.
The cryptocurrency’s recent drop in price is said to have been provoked by the fallout of the influential crypto bank, Silvergate, and the prominent market sell-off that followed.
Silvergate bank is a leading financial institution known for offering innovative services in fintech and cryptocurrency, including Bitcoin. It provides a widely used payments network that initiates real-time funds transfer between crypto firms.
The San Diego—based crypto bank suffered heavily from FTX’s collapse, causing investors to withdraw $8 billion in deposits in the last three months of 2022. It also recorded a loss of $1 billion for Q4 in 2022 and underwent a massive layoff.
The bank stated on Wednesday, stating that it had sold additional debt securities to repay debts. It added that there were “going concerns” about its ability to continue it as it could not file its 2022 annual report by March 16.
“The company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements,” it said.
Following the news, crypto firms like Coinbase, Paxos, and Galaxy Digital have switched to other banks and ceased services related to Silvergate. The firms have cited customer concerns and an “abundance of caution” for the terminated relationship.
Bitcoin’s Price Tumbles by 6%
The largest cryptocurrency fell by 6% before paring some slides to trade 4.6% lower at $22,347 as of 6:30 a.m. Friday, as per Bloomsberg’s report.
In a statement, John Toro, head of trading at digital-asset exchange Independent Reserve said-
“Silvergate is one of the crypto industry’s main US dollar banking providers. Any liquidity concerns will directly impact market conditions and may affect the access and availability of some client funds.”
The second largest crypto, Ether, alongside other small ones like Dogecoin and Avalanche, also suffered declines.
Other crypto exchanges have expressed concerns about the extent of Silvergate’s fallout and if other crypto players will follow suit.
“Big crypto-specific development to watch out for is the unfolding of events at Silvergate, as the crypto-friendly bank failed to file its annual report to the SEC, and its stock has come under heavy selling pressure,” Parth Chaturvedi, ecosystem lead at CoinSwitch, said.
“Markets are watching with bated breath to see if there’s another domino left to fall post the FTX fiasco.”
