After a big move higher in January, Bitcoin (BTC) and other top cryptocurrencies delivered more gains in February. Crypto investors are increasingly confident that the crypto winter of 2022 has passed by, and the market is looking prime for a bull run. Despite the optimism in the first two months of 2023, rising interest rates should continue to be a headwind for cryptocurrency prices in the months ahead. Furthermore, the spectacular collapse of the cryptocurrency exchange FTX has sparked a regulatory and legal backlash that has only recently begun to impact the market. In March, cryptocurrency analysts advised cryptocurrency investors to keep a wary eye on economic data and proceed with caution. On Friday, the cryptocurrency markets were trading in the red, with the global crypto market cap falling by 4%. Bitcoin (BTC) fell 4.5% to $22,386, while Ethereum (ETH) fell below $1,600. BTC volume in the last 24 hours was approximately $26.01 billion, an increase of 12.56%.
“In the past 24 hours, Bitcoin, Ethereum, and other cryptocurrencies dropped in value due to the release of US manufacturing data and uncertainties concerning access to banking services for crypto companies in the US. Furthermore, the fallout from Silvergate has contributed to the decline. Bitcoin has dropped below $23,000 for the first time in about two weeks, trading at $22,300.
The Silvergate Debacle?
Silvergate stated in a regulatory filing on Wednesday that it would be unable to file its annual report with the Securities and Exchange Commission on time. It said it would miss the March 16 deadline due to a further deterioration in its capital position since last month’s dismal fourth-quarter earnings report. Silvergate said it was “evaluating the impact that these subsequent events have on its ability to continue as a going concern for the 12 months following the issuance of its financial statements”.
Circle, Paxos, Bitstamp, Cboe Digital Markets, Galaxy Digital, and Gemini all announced on Thursday that they would suspend ACH transfers and other business operations with the bank, just days after crypto derivatives provider LedgerX did the same. Kraken appears to be the only major cryptocurrency exchange that is still using Silvergate, having terminated transactions with rival bank Signature (SBNY) on Wednesday.
This has impacted the market in a negative way, and we would see how the Silvergate situation unfolds over the next couple of weeks.
BigONE believes the market bottomed in November and is currently consolidating. For a proper bull run to begin, we need to create new narratives in the cryptocurrency space and support more innovative projects. As always, BigONE advises our users to conduct due diligence and do their research before investing in any digital asset.