Bitcoin on track for ~10% weekly loss on Fed fears, end of Silvergate Bank
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Bitcoin (BTC-USD) is about to post ~9.7% weekly losses as risk sentiment was dented by Federal Reserve Chairman Jerome Powell’s testimony signaling a potentially longer tightening cycle, as well Silvergate Capital’s (SAY) plans to liquidate.
In his testimony on Capitol Hill, Powell said “if the totality of the data should indicate that faster tightening is warranted, we would be prepared to increase the pace of interest rate increases”. He also said that the Fed has not yet made a decision on the pace of interest rate increases at the meeting on 21-22. March.
Meanwhile, Silvergate’s ( SI ) liquidation plans reignited fears of contagion in the crypto space, as the bank was among a few willing to take on crypto exposure.
“Bitcoin (BTC-USD) initially broke below $22K yesterday and now $20K appears to be crumbling as well,” said Craig Erlam, Senior Market Analyst, OANDA. “This is a major setback driven by another spate of negative headlines that have also hit sentiment in the broader markets. A testing weekend lies ahead.”
The top crypto crashed to ~$19.65K on Friday, its lowest level in almost two months. The total crypto market cap is currently $940.67B, down 0.1% over Thursday, according to CoinMarketCap.
Regulatory Brief
- The DOJ appealed a court order that approved Voyager Digital’s (OTCPK:VYGVQ) sale of more than $1B in assets to Binance.US. The court also overruled the SEC’s objection to the sale.
- Fed Deputy Chairman for Supervision Michael Barr said the central bank is improving oversight of crypto-related activities and setting up a team of experts to keep track of developments in the sector.
- Police in Singapore are investigating Terraform Labs, the company behind collapsed crypto Luna (LUSC-USD) and sister token TerraUSD (UST-USD).
Remarkable news
- Stablecoin issuer Circle Internet Financial revealed that it held a portion of its USD Coins (USDC-USD) cash reserves with the closed Silicon Valley Bank.
- Liquidators of failed exchange FTX (FTT-USD) submitted a proposal to sell its stake in Sequoia Capital to Al Nawwar Investments, a unit of the Abu Dhabi Investment Council, for $45 million.
- Crypto brokerage Blockchain.com is shutting down its wealth management service less than a year after it was first launched.
- Crypto exchange Bybit will temporarily stop USD deposits due to a service outage from its endpoint processing partner.
Bitcoin price
- Bitcoin (BTC-USD) ticked off 0.5% higher to $20.23K at 7:25 PM ET and Ether (ETH-USD) rose 0.3% to $1,543K.
- SA contributor Mike Fay said bitcoin (BTC-USD) is a hedge against bank managers and central planning. “One thing bitcoin has yet to see is an interest rate hike cycle quite similar to the one we’re in. Price is price and it will fluctuate.”
