US Bank Uproar Puts Bitcoin and Major Altcoins on Edge
As a result of three pieces of unfavorable news, the price of Bitcoin (BTC), the most important cryptocurrency when measured by market capitalization, fell below $20,000 over the course of the past week in the world of cryptocurrency trading. Even the alts had a difficult time. The continuing predicament with Silvergate Bank started the week off to a rocky start, which was unfortunate. Because the bank was having difficulty keeping its business operational, it made the decision to liquidate its interests, which caused share prices to fall despite the fact that there was significant short interest. In addition, Silvergate notified the SEC that it would be unable to submit its yearly report for the year 2022 on time because it required additional time for analysis, notebook entries for subsequent events, and the completion of management’s assessment of internal financial controls. In addition to this, there were unfavorable comments made by Fed Chair Jerome Powell about both the economy in the United States and cryptocurrencies, which further shook the markets.
- Inflation metrics have not performed as predicted, pushing Powell and the Fed to contemplate raising interest rates higher than initially planned.
- Powell warned that without a raise of the debt ceiling, the US government will not have enough funds to support the nation.
- He emphasized how chaotic the financial system currently is and urged Congress to swiftly pass laws to control cryptocurrencies and stablecoins.
- The situation only got worse after it was reported that the Southern District of New York’s Attorney Office had filed charges against the KuCoin exchange for operating in their jurisdiction without authorization and dealing with unauthorized Ethereum assets.
The situation only got worse after the reports were released. To make matters even worse, a United States bank known for its positive stance toward cryptocurrency, Silicon Valley Bank, shut down its operations in response to pressure from regulatory authorities. This led to a large-scale sell-off of connected banking companies that had some connection to cryptocurrency.
For those attempting to determine what caused yesterday's crypto crash
⚜ Biden raising the capital gains tax rate from 20% to 40%.
⚜ Silvergate liquidation – Biden 30% electricity tax on bitcoin mining and cryptocurrency
⚜ NY AG files a lawsuit against #KuCoin pic.twitter.com/VZOOKtZgSr
— cashflow.🎲📊 (@XXCASHFLOW) March 10, 2023
The cryptocurrency markets have been experiencing turbulence over the past week. Not only has the price of Bitcoin been beaten down, but the majority of the major cryptocurrencies have also felt the impact of this volatility. On Friday, the value of Ethereum fell below $1,400, indicating a significant loss for the cryptocurrency. However, the price of other cryptocurrencies, such as BNB, XRP, DOGE, SHIB, and UNI, fell on Wednesday by anywhere from 3% to 7%, with BNB being one of the most significant casualties. Even Litecoin and TRX suffered significant losses during this time period; at the conclusion of dealing on Friday, both of these cryptocurrencies had experienced declines of more than 13%.
🚨 Are we witnessing a banking crisis?
• Silicon Valley Bank (SIVB) -60%
• First Republic Bank (FRC) -60%
Banks across the board have been selling off. pic.twitter.com/xrJcuDKkjY
— whalechart 🐳 (@WhaleChart) March 10, 2023
During the week of March 2-10, the five biggest losers in the cryptocurrency market were STX (-32.71%), AGIX (-30.81%), MINA (-29.43%), RNDR (-28.77%) and DASH (-24.98%).