• Silvergate Collapse Causes Further BTC, ETH Losses – Prices of leading digital currencies including bitcoin and Ethereum took serious dips after news emerged that Silvergate was planning to shut down.
• Bitcoin Priced In The Move – Bitcoin only fell by about $2,000 or so likely due to it expecting the move and being prepared for it.
• Warning Signs Surrounding Silvergate – SVB Financial was previously working to raise more than $2 billion as a means of helping to offset the losses of bond sales.
Silvergate Collapse
The trouble surrounding Silvergate is getting even bigger resulting in prices of many leading digital currencies – including bitcoin and Ethereum – taking 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. Silvergate said it will wind down all operations and liquidate its assets in the coming weeks.
Bitcoin Prepared For Move
Jaret Seiberg – an analyst at Cowen – explained that there were plenty of warning signs surrounding the present aura of Silvergate and SVB Financial was working to raise more than $2 billion as a means of helping to offset the losses. Despite this, Bitcoin only fell by about $2,000 or so which could be because it priced in the move during preceding weeks and expected something like this would happen. This likely shielded investors and traders from what could have easily been a serious situation.
Increased Volatility & Lower Liquidity
Conor Ryder – research analyst at Kaiko – commented that bitcoin and other major cryptocurrencies have held up remarkably well throughout the turmoil despite increased volatility due to lower liquidity on both USD crypto pairs and U.S exchanges as liquidity providers are taking a wait-and-see approach. He mentioned: “In the short term, lower liquidity will lead to more volatility in markets and bigger price moves up or down”.
Crypto Firms Falling Victim To Bear Conditions
Companies like Three Arrows Capital and Block Fi have fallen victim to bear conditions since 2022 which has made it difficult for banks servicing crypto space as they concluded that there is not enough worth regulatory risk for them thus consolidating crypto exposure with smaller banks leadingto higher risks with concentration risk being one example amongst many others .
Conclusion
Overall crypto assets have held up remarkably well under such difficult circumstances but its clear that further advancements need o be made in order for crypto firms such as Silvergate who are struggling currently can bounce back successfully without facing too much adversity..