A pedestrian walks past signage for Ethereum, top, and Bitcoin outside the Hong Kong Digital Asset Exchange Ltd. digital currency trading store in Hong Kong, China, on Thursday, June 24, 2021.
Paul Yeung | Bloomberg | Getty Images
Cryptocurrency prices fell on Friday as investors weighed the latest financial woes at Silvergate Capital and assessed what a potential bankruptcy at the crypto bank could mean for the broader crypto industry.
Bitcoin dipped by more than 4% at $22,364.21, according to Coin Metrics. Ether fell about 5% to $1,565.58.
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The drop came late Thursday night, hours after several crypto companies said they’d stopped accepting or initiating payments to or from Silvergate – including Coinbase, Galaxy Digital, Circle, Paxos and Bitstamp. Silvergate, which has become the go-to bank for cryptocurrency businesses, gave notice Wednesday that it won’t meet an extended deadline to file its annual report and warned it may not be able to operate another 12 months.
“The bearish turn could certainly be a delayed reaction to Silvergate’s ongoing issues,” said Clara Medalie director of research at Kaiko. “Many large exchanges and market makers partner with Silvergate for fast transactions between entities, and any halt inactivity could have an impact on global crypto liquidity.”
Bitcoin and ether prices remained flat throughout Thursday, while shares of Silvergate dropped 57%.
“To start 2023, crypto markets enjoyed a solid rally to six-month highs following a slowdown in FTX-related contagion, but the Silvergate news has renewed concerns around liquidity and risk,” Medalie added.
Bitcoin, YTD
Bitcoin has recovered this year after tumbling more than 60% in 2022 to below $17,000 amid the pullback in risk assets and the implosion of FTX, which was a Silvergate customer. Even after the recent decline, bitcoin is up more than 30% this year — though it could be in for a month of sideways trading now that the broader…
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