The Bitcoin price hit its lowest level in two weeks and experienced its biggest one-hour drop since FTX bankruptcy in November last, as cryptocurrency markets tumble amid troubles at Silvergate Bank, whose shares have plunged 95% in 2022.
Messari Crypto specified that the token is trading 4% below US$22,394, while other major ones, such as Ethereum, are down 3%, at US$1,573, according to the Bloomberg news agency.
The market moves come after several companies like Coinbase, Circle, Galaxy Digital and Paxos to cut ties with Silvergatewhich is delaying its annual report due to higher losses, raising questions about the future of its business.
Many large digital asset exchanges work with Silvergate, for transactions between entities, and a decline in those relationships could affect the liquidity of the sector.
Binance partner Silvergate is facing a number of struggling companies, such as FTX at the time, which caused a massive decline in deposits amid broader crypto market contagion.
For Messari, the total cryptocurrency market capitalization sits above $1 trillion, nearly two-thirds below its all-time high in November 2021.
This situation of digital assets worsened last year as a result of a series of bankruptcies of cryptocurrency companies and the increase in borrowing costs by the US Federal Reserve (FED).
For Bloomberg, Investor sentiment could further deteriorate in crypto markets as traders brace for the Fed’s next move to curb inflationstill above the central bank’s target.
