Bitcoin slips below USD 23,000 in broad crypto price decline

by Arthur · March 2, 2023

Bitcoin and Ether prices fell in trading on Friday morning in Asia, along with all other top 10 non-stablecoin cryptocurrencies, amid reports that US-based cryptocurrency bank Silvergate Capital Corp. could become the next corporate victim of the FTX crash. Polkadot led the losses. US stocks rose on Thursday after a week of swings following conflicting comments from the Federal Reserve on interest rates and data suggesting inflation is firmly entrenched in the economy.

See related article: Bitcoin’s price gains this year bring much-needed relief to the cash-strapped cryptomining industry

Fast facts

Bitcoin fell 3.22% in the past 24 hours to $22,827 as of 09:30 in Hong Kong, according to CoinMarketCap data, extending its weekly loss to 4.78%. Ether fell 3.19% to $1,602, for a seven-day drop of 3.33%.
Both tokens fell as much as 5% later in the Asian morning. Despite the decline, both are still up around 40% year to date.
Polkadot led the losers among the top cryptocurrencies, falling 6.00% to $6.08 and losing 14.63% over the past seven days. The token has been in a downward trend for two weeks, although the Polkadot community remains active, leading the daily development on Github, according to the Github tracker ProofofGithub on Thursday.
Silvergate said in a filing with the US Securities and Exchange Commission (SEC) on Thursday that the company is assessing “its ability to continue as a going concern”, triggering a more than 50% drop in its share price. A number of crypto exchanges and platforms have cut ties with the bank.
As a Federal Reserve member bank, Silvergate positioned itself as a gateway between traditional finance and crypto. The bank was hit hard by the FTX collapse and reported a loss of USD 1 billion for the fourth quarter of 2022. It laid off 40% of its staff in January.
The total crypto market cap fell 1.02% in the last 24 hours to $1.07 trillion. And the total trading volume in the last 24 hours decreased by 12.30% to $42.65 billion.
US stocks closed higher on Thursday. The Dow Jones Industrial Average was up 1.05%, the S&P 500 was up 0.76% and the Nasdaq Composite Index was up 0.73%.
Atlanta Fed President Raphael Bostic indicated on Thursday that he supports a 25 basis point rate hike in March, allaying some recent concerns that the Fed could raise 50 basis points. That helped stocks move higher, but the market is caught in cross-currents as Fed Governor Christopher Waller said on the same day that fresh data suggested the inflation battle is far from over.
Data from the US Labor Department on Thursday showed that initial jobless claims fell in the week ended February 25, while labor costs rose, indicating that inflation has not been tamed by the Fed’s rate hikes so far.
The Fed set US interest rates between 4.5% to 4.75% in February, the highest since October 2007. Analysts at CME Group expect a 72.3% chance the Fed will raise rates by another 25 basis points this month. They also predict a 27.7% chance of a 50 basis point increase, down from 29.9% on Thursday.