The majority of the top cryptocurrencies continue to trade in a relatively narrow range, with trading volumes falling following the collapse of crypto bank Silvergate.
At the time of writing, Bitcoin is trading around $21,650, down about 2.5% from the last 24 hours, according to TradingView data. Ether followed, dropping 1.9% to $1,540.
Along with Bitcoin and Ether, other altcoins are also seeing a 2-5% drop on the day as sentiment in the market worsens following the failure of many crypto-related companies.
Market maker GSR noted that “Silvergate bank collapse has weakened the bank’s ability to support the crypto ecosystem,” news that affected many coins, like Binance’s BNB. down 1.5%, Ripple’s XRP down 2%, and Polygon’s MATIC down 2.3% as soon as Silvergate’s shutdown was announced.
Noelle Acheson, former head of market research at Genesis, wrote in her daily newsletter: “Investor interest in cryptocurrencies appears to have waned, including the equity ratio. Annual crypto infrastructure upgrades and support on crypto exchanges like Binance are all down.”
See also: Silvergate announced its shutdown and voluntary liquidation
Lots of negative news
Earlier today, Silvergate announced its intention to cease operations and voluntarily liquidate the bank. Put an end to one of the most prominent banks in the crypto space. SI was trading down 32% as of 11:05 a.m. EST, according to TradingView data.
Silvergate is expected to fully refund all deposits. “Silvergate has a cash surplus ($4.6 billion) compared to crypto deposits ($3.8 billion) as of Dec. 31,” KBW analysts said in a note last night. Silvergate was downgraded to “Covered – not rated” by KBW last week following the suspension of the Silvergate Exchange Network (SEN) cryptocurrency payment network.
Shares of Coinbase fell 1.7% to about $61, while shares of Jack Dorsey’s Block traded down 0.2% to about $77.80.
MicroStrategy down 2.2% to trade around $227. The software company has a $205 million outstanding loan with Silvergate. The KBW analyst said the loan was “significantly over-collateralized in bitcoin, we do not have detailed information on how or how much this loan could be liquidated”.
See also: Biden administration applies new rules to the crypto market