Crypto May Be Heading Into Its Biggest Week Ever After Wild Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon, and Solana Price Swings
BitcoinBTC, ethereum and other major cryptocurrencies saw their recent rally collapse as a regulatory “war” against crypto heats up.
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The bitcoin price had risen 50% since the start of 2023, but stalled and crashed back, wiping $100 billion from the combined ethereum, BNBBNB, XRPXRP, cardano, dogecoin, polygon and solana markets and reigniting fears of other crypto companies could follow FTX into bankruptcy.
Now fears are swirling that Silvergate, the crypto bank once described by FTX founder Sam Bankman-Fried as a major game changer for the industry, is on the brink of collapse – with one short seller predicting that the bank will implode. week.
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“I would be very surprised if the bank is open next week,” said veteran short seller Marc Cohodes The block after a long-running Twitter campaign against the California-based company.
Silvergate, which reported a loss of $1 billion for the fourth quarter, has seen its share price crash by about 95% over the past six months.
On Friday, ratings agency Moody’s downgraded Silvergate’s deposit rating after the bank said it would delay its annual report and warned about its “ability to continue as a going concern.”
“The recent news of Silvergate’s failure to file a report with the US Securities and Exchange Commission (SEC) as scheduled, and Galaxy Digital and Coinbase’s decision to cut ties with them may have led to fears among investors that the company’s bankruptcy is imminent imminent,” Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said in emailed comments.
Crypto heavyweights led by major exchange CoinbaseCOIN and crypto finance company Galaxy Digital dropped Silvergate as their banking partner this week as the bank shut down its 24-hour money transfer system known as the Silvergate Exchange Network (SEN).
“Silvergate’s death spiral is going to be difficult for crypto,” venture capitalist Adam Cochran posted to Twitter. “I don’t think retail investors realize how much market maker money quickly moved around via SEN, and how many crypto exchanges were/are banking with it.”
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Silvergate, along with rival Signature BankSBNY, began banking with crypto exchanges and other crypto companies in recent years, helping the industry expand via a so-called “bridge” to crypto from the world of traditional finance.
“Life as a crypto firm can be divided into pre-Silvergate and post-Silvergate,” FTX founder Sam Bankman-Fried was once quoted on the company’s website.
In the wake of FTX’s shock implosion last year, investors pulled more than $8 billion from Silvergate while the bank is also being investigated by US authorities over its links to FTX and sister trading firm Alameda Research.
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