Crypto Markets Suffer Sharp Drop as Silvergate Bank Issues Roil Markets4. March 2023
• Bitcoin (BTC) has dropped 5% in one hour overnight into March 3, 2021, reaching its lowest levels in over two weeks.
• The drop is mainly due to concerns over Silvergate bank and an exchange margin cascade which have pressured crypto markets.
• These events are part of a long-running saga beginning with the bankruptcy of exchange FTX, which caused many crypto exchanges to reduce or abandon their partnerships with Silvergate.
Bitcoin Price Drops Amidst Fresh Fallout
Bitcoin price has fallen significantly in the past 24 hours as cryptocurrency markets react to fresh fallout from the FTX bankruptcy and BTC bulls fail to defend already weak support. The largest cryptocurrency BTC/USD is now down 5% in one hour overnight into March 3, 2021, making it reach its lowest levels in over two weeks.
Silvergate Bank Liquidity Concerns
The main cause for the pain experienced by Bitcoin bulls lies with Silvergate bank. This banking partner of many well-known names in the crypto industry have begun reducing or abandoning their partnerships with Silvergate due to possible liquidity concerns after the United States Securities and Exchange Commission (SEC) delayed its annual 10-K report filing. As a result U.S exchange Coinbase announced that it had stopped using Silvergate, followed by Crypto․com who also suspended payments through this bank. Stablecoin giant Circle stated that they were sensitive to these issues and were “in the process of unwinding certain services” with them too.
These events mark just another step in a long running saga beginning with the bankruptcy of exchange FTX back in February which set off a chain reaction and put pressure on many crypto exchanges leading them to reduce or abandon their relationships with Silvergate altogether. This caused $200+ million worth of losses within hours according to reports from The Kobeissi Letter Twitter account, suggesting that this was not simply a coincidence but rather linked directly to these events occurring at once.
Implications for Crypto Markets
Analysts continue to speculate on how this move will play out after BTC/USD preserved $22,000 as support despite all odds being stacked against it at present time . Some are calling for calm while others believe that Bitcoin is still due for deeper retracement before any signs of recovery can be seen across crypto markets again.
Crypto markets are currently facing major turbulence fueled mainly by concerns over Silvergate bank combined with an exchange margin cascade putting additional strain on already weak supports across major cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and other altcoins alike.. Analysts remain divided however as some call for caution while others predict further losses until more stability returns across crypto trading platforms worldwide