As investors processed the dissolution of a crucial industrial payments network, bitcoin fell to its lowest point in approximately two weeks. This was part of a larger retreat in the cryptocurrency markets.
The biggest token by market value fell as much as 6% before reversing course and trading 4.72% lower at $22,365 as of the time of writing. Smaller coins like Dogecoin, Ethereum, and Avalanche all experienced decreases.
The issues at US bank Silvergate Capital Corp., which has stated that it is evaluating whether it can stay viable, are having an impact on the digital asset market.
The bank provides a well-known payment network that makes it simple for cryptocurrency companies to send money in real-time. Nevertheless, a lot of trading desks, stablecoin issuers, and digital asset exchanges no longer accept or start Silvergate payments.
The problems at Silvergate are the most recent illustration of the ripple effects of the fall of the FTX cryptocurrency exchange in November. Last year, after FTX, a significant client, filed for bankruptcy, there was a run on the bank’s accounts.
A greater regulatory crackdown in the US and expectations that interest rates will remain higher longer to combat inflation are further challenges facing the digital asset sector, which is stifling risk appetite.
Due to Bitcoin’s decline, some important technical levels became clear. Some chart analysts believe that the fact that the token has fallen below its 50-day moving average increases the likelihood of more falls.
At times of market stress, cryptocurrency investors frequently focus some of their attention on Tether, the largest stablecoin.
Co-founder of the social trading platform Alpha Impact Hayden Hughes claimed to have noticed “heavy buying” of Tether during a period of five minutes during the Friday am Asian trading session. Hughes stated, “We noticed a robust defense,” and added, “It was presumably by a market-maker.”
The return on bitcoin in 2023 has decreased to 35%, which is still significantly higher than the 4% return on global stocks. The crypto market had a $1.5 trillion collapse last year as a result of tightening monetary policy and a slew of catastrophes that exposed significant counterparty risk.
Image Credit: Shutterstock
Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.
