The cryptocurrency queen lost over 8% of its value in one day and almost 15% in one week. She reacted sharply to the announcement of the liquidation of the California bank Silvergate.
The cryptocurrency market is still in the red on Friday morning. On the night of Thursday to Friday, bitcoin fell below the symbolic $20,000 threshold, returning to mid-January levels. Today at 9:00 am, the asset lost 8% of its value in one day and 15% in a week. At the time of writing, it is still trading below this strategic technical threshold for investors. The second largest cryptocurrency by capitalization, ether, also broke through its supports, trading in the region of $1,400.
The reasons must be sought on the side of the United States, given a particularly turbulent week. Not only did Federal Reserve Chairman Jerome Powell give an aggressive speech on cryptocurrencies on Tuesday, but above all, the liquidation of the California-based Silvergate bank this Thursday hit the world. .
This is a tragic event, adding to other bankruptcies in recent months in the crypto ecosystem, from investment fund Three Arrow Capital, clearly bypassing the FTX giant, not counting all the doubts we may have around the Binance giant.
Explosion
With the sudden closure of Silvergate Capital, we have a real explosion of one of those rare bridges that exist between traditional finance and the world of cryptocurrencies. This small, local California-based bank became a champion in crypto finance and exchange in a few years, but couldn’t handle the shock of FTX’s bankruptcy.
Despite the recovery of the cryptocurrency universe from this period, the bank remains too fragile. Last week, all major platforms, including Coinbase, dropped their partnership with the latter, which had already mentioned stopping payments.
Silvergate is currently focusing on liquidating its assets in order to reimburse all of its customers and eventually find a way to sell its technology and infrastructure. And despite its small size, the Silvergate explosion is alarming. Indeed, the bank continued to be backed by management giants, including Vanguard and Blackrock.