Silvergate Capital Situation Fails to Dampen Crypto Market as Bitcoin Price Remains Steady Above $23K
Weekly Update
The Global Crypto Market Cap is down by 4.11% to $1.03T at the time of writing this article. Over the past 24 hours, the overall volume of the Cryptocurrency Market has increased by 21.70% to $55.39B.
DeFi’s total 24-hour volume is $5.42B, or 9.78% of the overall Crypto Market volume. All Stablecoin volume is currently $50.63B,, or 91.41% of the 24-hour volume of the whole Crypto Market. The total 24-hour volume of DeFi and Stablecoin has remained the same since last week.
The price of bitcoin was trading at $22,379.20 at the time of writing. According to data from CoinMarketCap, Bitcoin’s dominance is currently 42.10%, a decrease of 0.23% from the previous day. In the last 24 hours, the price of ETH decreased by 4.75% to $1,567.61, while the price of BNB went down by 2.72% to $291.08.
Despite the recent news surrounding Silvergate Capital, the price of Bitcoin remains steady and is holding above $23,000. Considering the impact of large-scale mining operations on local communities, an increasing number of investors are beginning to see the positive side of Bitcoin Mining. With various financing options for BTC mining now available, even small traders are now entering the mining space, preparing for a possible impending rally which could take BTC to a new ATH.
What happened to Silvergate Capital (SI)?
Silvergate Capital (SI) shares fell as much as 57% after the company announced on Thursday morning that it would postpone filing its annual report. Silvergate stated in an SEC filing on Wednesday that it needed more time to analyze the impact of regulatory inquiries and investigations, as well as to allow an independent auditor to complete an audit. Silvergate was unable to file its annual report on Form 10-K with the Securities and Exchange Commission for the fiscal year that ended on December 31, 2022. Silvergate has been granted a deadline extension until March 16, which they will also miss.
Many cryptocurrency industry participants have severed ties with Silvergate as a result of this admission. Coinbase (COIN) has stated that it will no longer accept or initiate payments to or from Silvergate, whereas Paxos has stated that while they will no longer process SEN transfers and wires to their Silvergate account, they will continue to process outbound transfers.
Silvergate was exposed to the now bankrupt FTX. According to a November 2022 statement, the total deposits from all FTX customers amounted to less than 10% of the $11.9 billion held. In the exchange, it had no outstanding loans or investments. Silvergate shares fell by 45% in one day in January of this year, following a reported $8 billion run on the bank as investors scrambled to withdraw their funds. The crypto-bank later that month reported a $1 billion loss for the fourth quarter of 2022.
What’s Next?
The recent concerns surrounding Silvergate have had minimal impact on the world’s largest cryptocurrency by market value, unlike the FTX collapse in November, which sent bitcoin plummeting to new yearly lows. Bitcoin’s price has remained relatively stable since then, hovering around the mid-$23,000 range.
While Silvergate’s delay in filing its annual report has raised concerns in the crypto-industry and caused some players to cut ties with the company, bitcoin has remained largely unaffected. This highlights the resilience of the cryptocurrency market and its ability to weather external shocks.
Investors will be keeping a close eye on both Silvergate and bitcoin in the coming weeks, as the crypto-industry continues to evolve and adapt to the changing landscape. As the market matures, it will be interesting to see how these two key players fare and what impact they have on the wider ecosystem.
