The latest price collapse comes amid fears of crypto banks

by Arthur · March 6, 2023

Bitcoin suffered a price drop in early March after a strong start to 2023 (Getty Images/iStock)

More than $60 billion has been wiped from the crypto market in recent days, fueled by the falling price of bitcoin.

The world’s leading cryptocurrency suffered a flash crash on Friday following uncertainty surrounding crypto-friendly bank Silvergate.

Bitcoin has so far failed to recover from the sudden price drop, leading to fears among investors that the strong start to 2023 may already be over.

Data from leading price index CoinMarketCap shows BTC’s price fell by more than $1,000 in just 20 minutes, dragging prices below $23,000.

“All this comes as the crypto sector comes off Silvergate Bank’s warning that it may not survive another year,” CoinMarketCap wrote in its daily market analysis.

“A virtual Who’s Who of crypto firms have now announced they are cutting ties with the embattled firm, while others are going to great lengths to emphasize that they have no exposure to Silvergate.

“The latest drama is particularly worrying, as Silvergate is (or was) one of the most popular providers of fiat ramps, and it could leave crypto businesses increasingly isolated from the banking sector.”

Despite the uncertainty surrounding Silvergate Bank, other crypto-friendly banks have seen significant success regardless of the market downturn over the past year.

UK-based Revolut announced its first ever annual profit last week, citing growing public interest in cryptocurrency.

The company, which has more than 25 million customers worldwide, said it was on track to reach $1bn (£850m) in revenue by 2022.

The fintech firm recently revealed plans to expand its crypto-related services by allowing customers to earn rewards by “staking” their cryptocurrency holdings.

Proof-of-stake cryptocurrencies such as Ethereum (ETH) and Cardano (ADA) allow owners to generate new cryptocurrency by staking their holdings to secure the network.

“Whether you’ve been holding onto some crypto for a while or you’re just getting started, there’s still so much potential to unlock – it’s time to put your crypto to work,” Revolut stated in a blog post announcing the new feature.

“Staking can be a complicated process – but with Revolut, it only takes a few steps to stake your crypto. All the heavy lifting is done for you and you’ll start earning automatically.”