Crypto assets such as Bitcoin and Ethereum have always been known to be impacted by the news, and the latest news today that resulted in a plummet in the market is the Silvergate fallout. This news has caused a sharp decline in two of the largest crypto assets in the market.
According to a report from Bloomberg, crypto platforms are now cutting ties with the U.S.-based crypto-friendly bank following its disclosure of its review of whether it can remain viable. So far, Coinbase and Digital Asset Capital Management are the latest on the list to end their partnership with Silvergate.
Bitcoin (BTC) And Ethereum (ETH) Sharp Decline
Following the negative news concerning the crypto-focused bank Silvergate, Bitcoin and Ethereum have both seen a sharp fall in price by 4.5% and 4.7% respectively over the past 24 hours. Both assets have seen notable differences in the highs and lows in the past 24 hours.
At the time of writing, BTC’s price made a 24-hour low of $21,921 and a high of $23,541. In contrast, ETH’s price has also made some notable movement with 24 hour low of $1,550 and a high of $1,653.
Notably, Bitcoin has since been indicating an upcoming bearish trend following its enormous 40% spike in January and its slowed-down rally in February.
Compared to January when BTC surged from the $16,000 zone seen late last year to as high as $23,799 as of January 29, the largest crypto by market cap only picked up from there to $25,000 in February having a little rally last month compared to the 40% seen the month before.
Currently, the BTC chart still indicates a continuous downward trend as the asset price is looking to dip below our previously marked-out support of just under $22,000. On the other hand, ETH price action is not far from being distinct.
Over the past week, Ethereum has been signaling a bearish trend after falling gradually by nearly 5% in the past 7 days despite the upcoming Shanghai launch. The asset has suffered a decline in not only price but also in market cap.
Over the past 15 days, more than $18 billion has been removed from ETH’s market cap after falling from a market cap high of $206 billion seen on February 16 to $188 billion as of March 3. Regardless, the asset still ranks steadily as the second largest crypto by market cap after Bitcoin.
Alongside BTC and ETH’s fall, the global cryptocurrency market capitalization has also suffered a 5% fall in valuation over the past 24 hours. Though the crypto market was able to maintain composure amid the regulator crackdown, the Silvergate saga appears to have a higher impact on the market.
Silvergate Relation With The Crypto Industry
Silvergate is a U.S. bank that has served the crypto market in general. The bank allowed the rapid transfer of funds between accounts and crypto exchanges such as Coinbase and Crypto.com, as well as over-the-counter trading desks with its Silvergate network.
Following the crash of the FTX exchange last year, the bank suffered a run on deposits given its connection with the exchange being a key client. After delaying its annual 10-K report with the Securities and Exchange Commission (SEC).
This week, the bank revealed that it is reviewing whether it can still continue to operate. This update has caused ripples within its list of partnerships, as well as a decline in its stock price. On Thursday, Coinbase announced that it has ended its relationship with the bank.
Shortly after that, other crypto platforms and firms such as Gemini, Crypto.com, and crypto hedge fund Digital Asset Capital Management disclosed they’re cutting off ties with the U.S.-based crypto-friendly bank. Richard Galvin, co-founder at Digital Asset Capital Management already said the company is looking to move away from Silvergate and look into Swiss banks, according to Bloomberg.
So far, Silvergate stock with the ticker SL has plummeted more than 10% from a high of $14 on Wednesday to $5.72 at the time of writing.