Bitcoin plunges as crypto bank Silvergate worries

The market a remote that night as the giants from sector take their distance with Silvergatea bank American crypto-friendly in difficulty.

This Friday, at around 2:00 a.m., Bitcoin (BTC) plummeted by nearly 5% and dropped below $22,300. Its price has since rebounded slightly and is now around 22,400 dollarsat the time of publishing this article.

Bitcoin 24 hour price – source: CMC

Similar findings for the vast majority of crypto-currencies, including Ethereum, which is down 4.7% to around $1,550.

According to several analysts, the cryptocurrency market is absorbing, among other things, the fallout related to the problems of the American financial institution Silvergate.

In the last 24 hours, access to banking services for the crypto companies in the United States has become a cause for concern. Silvergate, a California bank serving industry giants, has seen its customer base drift away after delaying the filing of its annual report and stated that it was reviewing whether it was able to continue its operations.

Coinbase, Galaxy Digital, Circle or even Paxos have announced to cut ties with the bank. “In light of recent developments and out of caution, Coinbase no longer accepts or initiates payments to or from Silvergate, tweeted San Francisco-based exchange.

Concurrently, Silvergate Bank indicated that it is currently reviewing “certain regulatory investigations “. Last month, Bloomberg reported that U.S. authorities have opened an investigation into Silvergate’s relationship with the FTX Group.

Former bank of FTXSilvergate began to falter following the exchange’s bankruptcy in November 2022, which triggered a first run on the counters. She stated at the time had “less than 10%” of its $11.9 billion in total customer deposits on the Sam Bankman-Fried.

In January, Silvergate announced a $1 billion loss in Q4 2022. At the same time, it made massive layoffs and halted its stablecoin project.

Silvergate is one of the leading providers of U.S. dollar banking services to the industry. Any liquidity issues will have a direct impact on market conditions,” commented John Toro, head of trading at Digital Asset EIR.

The price of Silvergate Capital Corp stockwhich peaked at nearly $220 in late 2021, closed Thursday at $5.72.

More broadly, the market is facing increasing regulatory pressure in the US on the crypto as well as the Federal Reserve policy on interest rates to fight against inflation. The correlation between Bitcoin and traditional stock exchanges, especially the Nasdaq, has been strong over the past year.

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