The crisis at Silvergate has sent shockwaves through the crypto industry, as the bank is a key financial intermediary for many companies and exchanges that deal in cryptocurrencies. Several major players in the industry, including Coinbase, Circle, and Paxos, have already cut ties with Silvergate in response to the crisis.
As the crisis at Silvergate Bank continues to deepen, the total cryptocurrency market cap has suffered a $51 billion drop. In the last 24 hours, the market cap plummeted to $1.017 trillion, hitting a 16-day low as Bitcoin briefly fell below $22,000.
Despite a minor rebound, market sentiment remains bearish amid the uncertainty surrounding Silvergate’s future. Bitcoin traders are predominantly short (53%), with the lowest long/short ratio in a month.
Meanwhile, the top 10 cryptocurrencies (excluding stablecoins) saw Litecoin and Dogecoin drop 8% and 6%, respectively, while dYdX took the biggest hit, sinking 13.9% over the same period.
The recent announcement by Silvergate that it cannot meet the March 16 filing deadline for its 10-K report has sparked alarm among analysts, causing its stock price to drop nearly 50%. Several crypto firms, including Coinbase, Circle, and Paxos, have cut ties with the bank. Moreover, FTX is under investigation for an $8.9 billion discrepancy in customer funds, with outstanding balances owed amounting to $11.6 billion, leading to concerns of overexposure.
Overall, the situation at Silvergate is a stark reminder of the risks involved in the cryptocurrency industry and highlights the need for robust financial infrastructure and risk management practices to ensure the stability and security of the market.
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