• Silvergate, a major cryptocurrency bank, is shutting down and liquidating its assets.
• This news has caused prices of Bitcoin and Ethereum to dip significantly in the early weeks of March.
• Analysts have warned of potential risks associated with this move by Silvergate, as well as other crypto companies that have closed due to bear conditions in 2022.
Silvergate Collapse Causes Significant Losses for BTC & ETH
The recent news that Silvergate – a major cryptocurrency bank – will be shutting down and liquidating its assets has caused significant losses for Bitcoin (BTC) and Ethereum (ETH). Prices for these digital currencies fell from around $22,300 to just over $20,000 after the announcement was made.
Risks Surrounding Crypto Space Highlighted
Analysts have been vocal about the potential risks associated with this move by Silvergate. Jaret Seiberg of Cowen argued that large banks may not be willing to service the crypto space due to regulatory risk concerns. Conor Ryder of Kaiko also noted that liquidity among USD pairings and U.S exchanges had dropped considerably since the news broke.
Bear Conditions Responsible For Company Deaths
The death of Silvergate is yet another company added to the growing list of cryptos who have suffered under bear market conditions in 2022. These include firms like Three Arrows Capital and BlockFi, who have had their business models heavily impacted by market uncertainties throughout the year.
Bitcoin Has Shown Resilience Against Volatility
Despite these challenging market conditions, bitcoin has fared surprisingly well during this period – only falling by around $2000 or so following news of the collapse of Silvergate. This suggests that investors were prepared for a possible downturn due to prior warning signs given off by SVB Financial’s attempts to raise more than $2 billion as a means of offsetting bond losses within their organization.
Outlook for Crypto Companies Uncertain
Overall, it remains unclear what direction crypto companies will take moving forward given current market uncertainty and regulatory concerns from larger banks regarding investment into cryptocurrencies. Investors should keep an eye on any further developments related to these issues in order to gain insight into how they may affect future investments into digital currencies.