Silvergate Collapse Causes Major Losses in Crypto Markets

Alisha Deo

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• Silvergate is planning to shut down, causing a dip in the prices of bitcoin and Ethereum.
• Analysts have pointed out that there were warning signs surrounding the company, making it hard for banks to service the crypto space due to regulatory risks.
• The death of Silvergate is just one example of the growing number of crypto firms that have fallen victim to the bear market conditions in 2022.

Silvergate Collapse Causes Further BTC, ETH Losses

The news that Silvergate is planning to shut down completely has caused a significant dip in the prices of many leading digital currencies – including Bitcoin and Ethereum. Bitcoin fell from about $22,300 to just over $20,000 after this news emerged. Despite this drop, analysts believe that Bitcoin was likely prepared for this move and thus shielded investors from experiencing more serious losses.

Warning Signs Surrounding Silvergate

Jaret Seiberg – an analyst at Cowen – explained in a recent note that there were plenty of warning signs surrounding Silvergate before its eventual collapse. SVB Financial – a Silicon Valley-based bank providing funds to tech startups – was previously attempting to raise more than $2 billion as a means of helping offset bond sales losses faced by the company. According Seiberg’s analysis, this made it difficult for large banks to service crypto space due to increased regulatory risks associated with such activities.

Crypto Assets Holding Up Well

Conor Ryder – research analyst at Kaiko – commented on how remarkably well crypto assets have held up throughout all this turmoil. He pointed out that data showed an increase in euro volumes for bitcoin versus dollar over last week, as well as a decrease in liquidity on both USD pairs and U.S exchanges due to liquidity providers taking a wait-and-see approach towards these markets. Such trends could lead to greater volatility and bigger price moves up or down in the short term according Ryder’s analysis.

Growing Number Of Crypto Firms Falling Victim To Bear Market Conditions

The death of Silvergate is just another example on an ever-growing list of companies who are falling victims to bear market conditions present since 2022. Other examples include Three Arrows Capital and Block Fi – both companies which experienced major losses during their respective times of operation due largely unfavorable macroeconomic conditions affecting digital currency investments globally during this time period.

Conclusion

Overall, while cryptocurrency investors may take comfort knowing their assets are holding up relatively well despite news surrounding Silvergate’s closure; they should remain aware that current bear market conditions could still lead other vulnerable companies into similar situations moving forward if not properly managed or monitored closely by interested parties involved with such investments..

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