Bitcoin falls to eight-week low in wake of Silvergate’s shutdown

Bitcoin falls to eight-week low in wake of Silvergate’s shutdown

The price of Bitcoin recently dropped by nine percent to $19,700, its lowest in eight weeks, in the wake of Silvergate Bank’s collapse.

Coinmarketcap also reported that the total market cap for crypto had dropped by over eight percent through Friday morning from $994 trillion to $914 billion.

Crypto markets were under pressure on Thursday due to broader financial problems in the banking sector that saw the shares of SVB Financial, the parent company of Silicon Valley Bank, drop by 60 percent.

Earlier on Wednesday, Silvergate Bank’s parent company, Silvergate Capital (SI), announced that the bank would “voluntarily liquidate” its assets and wind down its operations.

Last week, Silvergate put off filing its annual report and warned that it might not be able to continue as a going concern. This situation caused investors to panic and the price of $BTC to drop.

Crypto investors and businesses are trying to determine what will happen when SI, a key U.S. banking partner, goes out of business.

In an email to CoinDesk, Julius de Kempenaer, senior technical analyst at, said that if more service providers to the crypto market, such as Silvergate, fail, crypto will be harder to access and will be less appealing to new investors.

Stefan Rust, CEO of economic data aggregator Truflation, explained that the crisis at Silvergate would slow the rate at which institutions enter the market because they do not “have an on- and off-ramp that scales as quickly.”

Silvergate operated the Silvergate Exchange Network (SEN), a payments network that enabled off-blockchain money transfers between investors and crypto exchanges. The company shut down SEN last week.

On Thursday, an analyst for Kaiko Conor Ryder said that euro and non-dollar-backed stablecoins are alternatives if smaller banks like Customers and Pathward, formerly MetaBank, don’t fill the void.

Noelle Acheson, author of the Crypto Is Macro Now newsletter, explained to Yahoo Finance that the industry will not transition easily. He acknowledged that this would be a setback for the ecosystem but argued that the effects would not last forever.