The entire cryptocurrency market is reeling from a lot of negative news about the solvency of crypto companies.
All gains were wiped out in today’s trading session (March 3) as market uncertainty continued to flare over the solvency of crypto bank Silvergate.
Data from Coingecko shows the bitcoin price down 5.2% over the past 24 hours, currently trading at $22,307 at press time.
The market is currently under selling pressure because of the news surrounding the fate of crypto bank Silvergate. Following the alleged troubles at Silvergate Bank, Coinbase announced that the exchange will no longer accept or initiate payments in Silvergate.
Silvergate suffered great consequences since FTX went bankrupt, and now Coinbase has terminated its partnership.
Shares of parent company Silvergate Capital are down 40% on the day at press time. Coinbase also felt the pressure, with Coinbase Global (COIN) stock dropping 9.65%.
“Silvergate is likely to go bankrupt, which could drag the bitcoin price slightly lower,” said Michaël van de Poppe, founder and CEO of trading firm Eight.
Renowned trader and analyst Stack Hodler is bullish on bitcoin.
“Coinbase, Silvergate, Bank of America and the Federal Reserve could all blow up overnight and that won’t change the amount of BTC I hold,” he said on Twitter.
Inflation report disappointing for risk assets
Another worrisome point comes from the day’s macroeconomic data showing that inflation remains more persistent than central banks’ expectations.
Both the United States and the European Union have posted disappointing reports, with the former showing no increase in the unemployment rate.
Analyst Keith Alan said Federal Reserve and Chairman Jerome Powell may now have more incentive to keep rates rising, which he says is “a major headwind for cryptocurrencies and risk assets.”
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