Bitcoin below US$22,000 as Silvergate failure hits market

by James · March 8, 2023

Bitcoin below US,000 as Silvergate failure hits market

Bitcoin fell below the $22,000 support line in Thursday morning trade in Asia, with Ether and most other leading cryptocurrencies losing ground after US crypto bank Silvergate said it will voluntarily liquidate. The bank has been teetering on the brink of insolvency for several weeks, and was yet another victim of the FTX exchange’s collapse in November last year. Solana led the losers among the top 10 cryptocurrencies by market cap and the total industry cap fell below $1 trillion. XRP rose. US stocks closed mixed on Wednesday, jittery over the prospect of higher-than-expected interest rates this year.

See related article: Silvergate tilts as regulators circle and crypto firms cut ties

Fast facts

Bitcoin fell 2.34% in the last 24 hours to USD 21,729 as of 09:00 a.m. in Hong Kong, according to CoinMarketCap data, bringing the loss for the past seven days to 8.06%. However, the largest token by market capitalization is still up more than 30% for the year so far after a strong start to 2023 following last year’s decline amid the crypto industry’s bankruptcies and scandal.
Ether, the second-largest cryptocurrency, fell 1.99% to $1,535, bringing its weekly loss to 7.55%. Although, like Bitcoin, it has had gains for the year so far, up 28%.
Solana led the losers, falling 8.86% to $18.49 for a seven-day loss of 17.49%
XRP continued its uptrend despite the Silvergate Bank issues in the broader market, rising 2.69% to $0.39. Stuart Alderoty, the chief attorney for XRP-powered crypto payment network Ripple Labs, tweeted on Wednesday that the court supported some of Ripple’s defenses in the lawsuit against the company by the US Securities and Exchange Commission. “We have always felt confident in our case and with each ruling, even more so,” Alderoty said in the tweet. The token gained 2.50% during the seven-day period.
Shiba Inu fell 0.55% in the last 24 hours, but still managed to dislodge Litecoin as the 10th largest unstable cryptocurrency by market capitalization. The price of the meme token rose briefly on Wednesday, after a announcement that Shibarium – a Shiba Inu layer-2 blockchain for Web3 and games – will launch its beta version this week.
Silvergate Capital Corp. announced on Wednesday that it intended to shut down operations and liquidate Silvergate Bank, a California-based lender that served the crypto industry, due to the mounting financial losses and regulatory investigations it is facing.
The total crypto market capitalization fell 2.26% in the last 24 hours to USD 995.70 billion. Total trading volume in the last 24 hours fell by 0.43% to USD 44.50 billion.
US stocks traded mixed on Tuesday. The Dow Jones Industrial Average closed 0.18% lower, the S&P 500 rose 0.14%, and the Nasdaq Composite Index rose 0.40%.
Federal Reserve Chairman Jerome Powell told Congress on Wednesday that the central bank has not decided on the size of the rate hike expected at the bank’s meeting later this month, but will consider the latest economic data on inflation first. Powell said on Tuesday that steeper rate hikes may be needed to reduce inflation, prompting a selloff in U.S. stocks the same day.
U.S. jobs data released on Wednesday suggested inflation remained anchored, with private employers adding 242,000 jobs in February 2023, beating Reuters’ expectation of 205,000, according to a report from Automatic Data Processing.
The Fed has raised US interest rates eight times since March 2022, with today’s rate between 4.5% to 4.75%, the highest since October 2007. Analysts at CME Group expect a 21.4% chance the Fed will raise rates further 25 basis points this month. They also forecast a 78.6% chance of a 50 basis point increase, up from 69.8% on Wednesday.