Bitcoin Plunges After Silvergate Bank Shutdown: Is 2022 Coming Back?
• The world’s leading digital currency, Bitcoin, fell by more than 8% after the news of Silvergate Bank shutdown.
• The crypto space briefly fell below the $1 trillion mark after the bank’s closure.
• Jerome Powell and other analysts have cited global macroeconomic conditions and interest rate increases as reasons for the bearish market sentiment in 2023.
The Shutdown of Silvergate Bank
In mid-March, the world’s leading digital currency (bitcoin) fell by more than eight percent and briefly went below the $20K mark. The dip occurred after news got out that Silvergate Bank – a tech-friendly financial institution stationed in Northern California’s Silicon Valley – was being shut down by regulators for numerous failures. Many have called this one of the biggest monetary collapses since the Great Recession. With the closing of Silvergate, the crypto space again briefly fell below the $1 trillion mark, which it surpassed earlier in the year when assets like bitcoin and many other mainstream digital currencies appeared to be on the verge of a serious rally.
Effects on Bitcoin Price
BTC hit a six-month high of about $25,000 per unit in mid-February, giving many traders hope that bearish market conditions from 2022 were finally over and done with. Sadly, that positivity has disappeared in recent weeks due to several factors including bad news from Silvergate Bank’s closure as well as statements from Federal Reserve head Jerome Powell indicating higher interest rates throughout 2023 than previously expected.
Negative Sentiment Amidst Bad News
Analysts have commented on how there is little reason to buy bitcoin now given all these negative developments across both global markets and in particular with regards to crypto assets. Yuya Hasegawa – an analyst at Japanese crypto firm Bit Bank – explained: “There is just little reason to buy bitcoin now as the market is saturated with negative developments…” Vijay Ayyar – vice president of corporate development at crypto exchange Luno also noted: “Overall sentiment seems to have turned quite bearish given a combination of global macro and interest rate rises…”
Will 2023 Be Another Dismal Year?
With these latest developments concerning Silvergate Bank’s closure coupled with increased interest rates from Jerome Powell‘ statement, many people wonder if 2023 will follow suit after last year’s dismal performance for cryptocurrencies.
< h2 >Conclusion h2 >
It remains unclear what exactly lies ahead for cryptocurrency markets following this latest slew of bad news regarding Silvergate Bank shutting down combined with increasing interest rates predicted by Federal Reserve chairman Jerome Powell. Only time will tell if 2023 will be another difficult year or if we can look forward to brighter prospects ahead – but one thing’s certain; investors should remain wary even during periods of positivity within cryptocurrency markets as seemingly small changes can lead to drastic shifts in prices overnight!