While cryptocurrencies are no stranger to sudden market movements and volatility, the latest market shake-up has left many in the industry reeling.
A big red bar appeared on trading charts for major cryptocurrencies on Friday, with their values plunging by hundreds of millions of dollars within hours.
In the last week, Bitcoin‘s (CRYPTO: BTC) price fell by 4.8%, while Ethereum (CRYPTO: ETH) saw a 3.9% decline.
Altcoins also had a poor performance in the last week, with Cardano (CRYPTO: ADA) and Solana (CRYPTO: SOL) falls by 6.3% and 8.3% respectively. Shiba Inu (KRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE), two popular memecoins, also suffered losses, falling 9.9% and 5.5% respectively.
ENTER TO WIN $500 IN STOCKS OR CRYPTO
Enter your email and you’ll also receive Benzinga’s ultimate morning update AND a free gift card of $30 and more!
Uncertainty surrounding Silvergate Bank: One of the main reasons behind the sudden drop in cryptocurrency prices was the uncertainty surrounding it Silvergate Bank (NYSE:SI), a California-based crypto bank that plays an important role in providing market liquidity.
Silvergate Bank shares fell a staggering 58% in US trading on Thursday and continued their downward spiral on Friday.
The bank allows cryptocurrency exchanges and other customers to exchange cryptocurrency for fiat money, and the fall has sparked concerns about the stability of the cryptocurrency market.
Coinbase Dumps Silvergate: Another factor that contributed to the market decline was Coin base(NASDAQ:COIN)’s decision to suspend payments to Silvergate.
Coinbase, one of the largest cryptocurrency exchanges in the world, cited “technical issues” as the reason behind the suspension.
Still, the move has raised concerns about the safety and security of cryptocurrency exchanges.
Gemini, Crypto.com, Bitstamp and MicroStrategy (NASDAQ:MSTR) wash your hands of Silvergate: On March 2, several cryptocurrency companies announced temporary stops accepting deposits made through Silvergate Bank.
This further exacerbated concerns over bank stability and the security of cryptocurrency exchanges.
Also read: Is Silvergate’s fall certain? Industry experts react to Cryptocurrency Banks’ problems
SEC Chairman Gensler Says Crypto Exchanges May Not Be Eligible Custodians: At a recent meeting of the Investor Advisory Committee, SEC Chair Gary Gensler expressed skepticism about the idea of crypto exchanges acting as qualified custodians for investment advisers.
He acknowledged that a proposed rule requiring advisers to use qualified custodians for the storage of assets, including cryptocurrencies, would improve existing protections.
This has once again raised questions about regulation and oversight of cryptocurrency exchanges and has contributed to market instability.
Wallets linked to FTX.com and FTX.US exchanges facing a significant deficit of $2.2 billion: The news that FTX Trading Ltd. (CRYPTO: FTT) and its affiliated debtors have reported significant shortfalls in fiat bank accounts and digital assets linked to the FTX.com and FTX.US exchanges, totaling $2.2 billion.
The company shared a presentation with the Official Committee of Unsecured Creditors and announced it will file for Chapter 11.
This has contributed to the general feeling of instability and uncertainty in the market.
Read now: Much Wow! If You Invested $100 When Elon Musk First Tweeted About Dogecoin, Here’s How Much You’d Have Now
