• Silvergate collapsing has caused further losses for both BTC and Ether.
• Bitcoin only fell by about $2,000 due to investors and traders being prepared for this news.
• Many crypto firms have fallen victim to the bear conditions of 2022.

Silvergate Collapse

The collapse of Silvergate has caused significant losses in many leading digital currencies, including bitcoin and Ethereum. Prices dropped significantly during the early weeks of March when news emerged that Silvergate would be shutting down operations and liquidating its assets. Despite this, bitcoin held up surprisingly well and only fell by around $2,000.

Warning Signs

Jaret Seiberg – an analyst at Cowen – explained there were plenty of warning signs surrounding the present aura of Silvergate. SVB Financial – a Silicon Valley-based bank providing funds to tech startups – was attempting to raise more than $2 billion as a means of offsetting bond sales losses. This will likely lead to banks consolidating their crypto exposure into a handful of smaller banks, which may lead to more liquidity risk and more concentration risk according to Seiberg.

Falling Victim

The death of Silvergate is just one more example in a growing list of crypto companies that have been affected by the bear conditions in 2022. Notable examples include Three Arrows Capital and Block Fi who have both been victims of the market downturns seen throughout the year.

Liquidity Drop

Conor Ryder – research analyst at Kaiko – commented that bitcoin had experienced a drop in liquidity on both USD crypto pairs and U.S.-based exchanges due to liquidity providers taking a wait-and-see approach in order to protect themselves from potential risks associated with cryptocurrencies.

Conclusion

Overall, it appears that cryptocurrency companies are struggling due to market downturns seen throughout 2022, with Silvergate being one of the latest casualties in an ever-growing list of firms affected by bearish conditions across the industry. Despite this, some digital currencies have held up relatively well despite these issues; however, it remains unclear what will happen next as liquidity continues to drop across platforms dealing with cryptocurrencies