Bitcoin hits two week low, Silvergate unravels
Is anyone investing in cryptocurrency anymore?
Bitcoin’s price on Friday at one point marked a two-week low for the cryptocurrency, with it later selling at roughly $22,300 in the afternoon.
That came after Silvergate Capital said Wednesday it was assessing its “ability to continue as a going concern.” Silvergate Capital is a publicly-traded bank that offers fintech and crypto firms services.
FTX FALLOUT HITS SILVERGATE, BITCOIN
In a Wednesday filing to the Securities and Exchange Commission (SEC), Silvergate Capital disclosed its inability to submit its annual report to the regulator by March 16, the extended deadline it had to do so. It cited a need for “additional time to perform analysis, record journal entries related to subsequent events and to complete management’s evaluation of internal controls over financial reporting,” according to the SEC filing.
The company referenced events subsequent to the end of 2022 that it said would “negatively impact the timing and the unaudited results previously reported in the earnings release,” one of which was the sale of “additional” debt securities in January and February. It was “currently in the process of reevaluation its businesses and strategies in light of the business and regulatory challenges it currently faces,” Silvergate said in the filing.
SLIMMED-DOWN CRYPTO LEGISLATION COMING IN APRIL: SENATORS LUMMIS, GILLIBRAND
On Thursday, some crypto companies – prompted by the news about the bank – started backing away from Silvergate.
Coinbase, for example, said it had stopped “accepting or initiating payments” to or from the bank “in light of recent developments & out of an abundance of caution.”
Paxos and Galaxy, among others, announced similar steps.
VISA, MASTERCARD PAUSE CRYPTO PUSH IN WAKE OF INDUSTRY MELTDOWN
FxPro senior market analyst Alex Kuptsikevich said in a statement that Bitcoin “plunged more than 6% to $22.0K early this morning.” That plunge technically “pushed the price below its 50-day moving average, which does not bode well for the short-term outlook, although this signal will only be reliable at the close of the day.”
“A return above $22.8 an ounce before today’s close could spark further buying,” Kuptsikevich also said. “Closing near the lows would be an essential signal to spread fear throughout the crypto market, suggesting a further drawdown to $19.7K in the coming weeks.”