The Bitcoin currency loses 5% and registers its biggest daily decline since November in the stormy days of the FTX collapse – the popular currency traded for 22.3 thousand dollars. Ethereum, the second largest digital currency by market value, also loses 5% of its value and trades for $1,568.
In the background of these things, there is again concern on the part of investors, as new troubles land on the digital currency market, which has already managed to partially recover from the collapse of the FTX crypto exchange. Now it is about the crypto bank Silvergate Capital, which may face bankruptcy proceedings and wreak further disaster on the entire sector. Its shares are traded on Wall Street and fell by 57% last night. Today the stock is sinking another 10%.
Well-known companies in the sector, such as Coinbase and Galaxy Digital, have already announced that they will stop the transfers and withdrawals of the digital currencies in their possession to and from the bank. Silvergate is the popular crypto bank for those companies, and FTX also used its services.
Silvergate announced that the publication of the reports will be postponed due to a larger than expected loss in 2022, in addition to the ongoing investigations against the bank that weigh on it. The US Department of Justice is investigating the bank’s dealings with FTX and its sister company Alameda, and more specifically investigating bank accounts linked to FTX founder Sam Bankman-Fried, who is known to be accused of defrauding investors – with multiple charges.
As mentioned, Silvergate announced that they would not meet the deadline (which was also extended) for the publication of the 2022 results, and even warned that the bank’s activities may be halted in the next 12 months.
Bitcoin fell in 2022 by 60% when at the low point of that year it reached below the price of 17 thousand dollars. But since the beginning of the year there have been gains in currencies leading to a six-month high, as the sector began to recover from the collapse of FTX.
Now the market is once again in turmoil and concerns about liquidity problems that characterized the sector with the fall of FTX alongside the sharp declines on Wall Street last year, and especially on the Nasdaq, followed by the crypto market. But even after the daily decline, Bitcoin has jumped 30% since the beginning of the year.
Silvergate’s value on Wall Street is $170 million – its stock has collapsed since the beginning of 2022 by more than 90%.