Cryptocurrency industry still reeling from Silvergate Bank collapse Bitcoin has seen a sudden price rebound at the start of the week, rising nearly 10 per cent in the space of a few hours after fears about a potential banking crisis subsided.
The world’s leading cryptocurrency briefly dipped below $20,000 on Friday – its lowest level since the start of the year – following the collapse of crypto-friendly Silvergate Bank and fears about Silicon Valley Bank appeared to spook investors.
Bitcoin and other top cryptos experienced a surge in prices on Monday after two positive announcements. The US government said it would protect customers’ funds, while banking giant HSBC agreed to buy the UK operations of SVB. This news caused the broader crypto market to experience similar gains, with Ethereum (ETH), Cardano (ADA) and Solana (SOL) also seeing price increases.
The bounce back pushed the overall crypto market cap back above the $1 trillion mark, though the winding down of Silvergate continues to be a concern for the crypto industry.
Bitcoin’s strong start to 2023 suffered a major setback after Silvergate Bank, a California-based bank, became the latest casualty of the so-called crypto winter. The bank blamed recent industry and regulatory developments for its downfall, saying in a statement last week that “an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward”. These industry developments include the collapse of the Mt. Gox crypto exchange and the US Securities and Exchange Commission’s (SEC) crackdown on initial coin offerings (ICOs).
Silvergate’s collapse has left nearly as big a hole in the US cryptocurrency industry as FTX’s did, according to leading crypto price tracker CoinMarketCap.
Crypto.com, among others, is struggling to find a way for customers to move dollars into their trading accounts and off-ramp them into their bank accounts.