•Silvergate Collapse Causes Further BTC, ETH Losses
•Bitcoin and Ethereum Prices Take Serious Dips
•SVB Financial Working to Raise Funds to Offset Losses
Silvergate Collapse Causes Further Crypto Losses
The troubles surrounding Silvergate have caused prices of leading digital currencies – including bitcoin (BTC) and Ethereum (ETH) – to take serious dips during the early weeks of March. After news emerged that Silvergate was planning to shut down completely, Bitcoin fell from about $22,300 to just over $20,000. SVB Financial, a Silicon Valley-based bank providing funds to tech startups, is attempting to raise more than $2 billion in order to offset the losses of bond sales.
Bitcoin Price Dip Not as Severe as Expected
Despite the major dip in price for Bitcoin, it appears that investors and traders were expecting such an event due to the relatively small magnitude of the drop; Bitcoin only fell by about $2,000. Jaret Seiberg – an analyst at Cowen – said there were plenty of warning signs surrounding Silvergate’s situation prior to its collapse. This means banks are reluctant service the crypto space due increased risk exposure posed by regulators.
Crypto Assets Holding Up Well with Low Liquidity
Conor Ryder – research analyst at Kaiko – commented that bitcoin and other major cryptocurrencies have held up remarkably well throughout the turmoil despite low liquidity levels on U.S exchanges and USD crypto pairings due to wait-and-see approach taken by liquidity providers. Low liquidity has leaded bigger price moves both up or down in the short term.
So Many Dying Companies Affected By Bear Market Conditions
The death of Silvergate is just one example among many companies affected by bear market conditions in 2022; this includes Three Arrows Capital and BlockFi who also faced similar issues before shutting down operations completely.
The collapse of Silvergate is yet another reminder of how volatile the crypto market can be; however there appears some good news in that leading digital currencies were prepared for such events given their relatively low level losses compared to what could have been expected otherwise if not foreseen ahead of time.