On March 3, the cryptocurrency world shook again, with the price of Bitcoin plummeting more than 5% in just over 60 minutes. The sudden drop, which took the price from $23,500 to $22,240, is linked to increased uncertainty at Silvergate own Capital due to its friendly stance towards the crypto industry.
The price drop wiped a staggering $22 billion off Bitcoin’s total market capitalization, which currently stands at $430.9 billion, according to Cointelegraph Markets Pro. Other cryptocurrencies, including Ether, XRP, Cardano, and MATIC, suffered similar situations.
Markus Thielen, head of research at digital asset platform Matrixport, believes the price drop is directly related to the recent Silvergate Bank controversy. The bank has yet to file its annual 10-K financial report, leading to growing uncertainty about fiat on-ramps and off-ramps. Additionally, U.S. regulators stepped up efforts to limit links between banks and crypto firms.
Thielen explained that “there is widespread concern in the industry that U.S. regulators are trying to cut off further banking ties between crypto companies and FDIC-insured banks.” Currency is more friendly.
Despite a strong start to 2023, with BTC still up 34.8% for the year, the sudden drop is a reminder of the volatility in the cryptocurrency market. Notably, BTC changed hands at just $16,550 on Jan. 1, meaning it is still up significantly since the start of the year.
Ether, the second-largest cryptocurrency by market capitalization, was also hit hard, falling 4.74 percent to $1,566 from $1,644. This wiped $9 billion off its market cap in the first hour.
Several technical analysts on Twitter claim to have predicted a drop to the $23,000 resistance level. The last time BTC was priced at $22,250 was on February 15.