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Crypto prices fell Thursday after Silvergate, a bank that has been at the center of the industry’s growth, made a decision to shut down.
Bitcoin dipped 2% to $21,570.04, according to Coin Metrics. Ether lost nearly 2% and was last trading at $1,527.58.
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The slight move lower began late Wednesday, a few hours after Silvergate Capital announced it will wind down operations and liquidate its crypto-friendly bank.
The relatively small size of the move indicates that cryptocurrency investors priced the news in last week when the company first warned it may not be able to continue operating and it shut down the SEN, or Silvergate Exchange Network, according to Conor Ryder, research analyst at Kaiko.
Bitcoin on Thursday
Bitcoin and ether have held up relatively well despite a challenging macroeconomic environment — still the biggest driver of crypto price action despite a declining correlation between crypto and stocks — and a series of setbacks for the space, including the recent Silvergate developments and the post-FTX regulatory crackdown on the industry that began in February.
Bitcoin’s correlation with stocks is lower than it was for much of 2022 and its volatility has been near historic lows for the past few weeks.
Thursday’s move pushed bitcoin below the key technical level of $22,200. While some investors have welcomed bitcoin’s recent sideways movement in light of a series of negative industry developments, chart analysts have been looking for the cryptocurrency to close above $25,000 to give more meaning to its year-to-date gains, now around 30%.
A drop in liquidity
The end of Silvergate is concerning for the industry, which now expects a slowdown in inbound flows without the SEN or enough reliable alternatives.
Businesses still have Signature Bank, whose Signet platform is comparable to Silvergate’s SEN, but the company has already said it plans to limit its crypto exposure in…
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