Bitcoin fell by $1254 in just a few hours moments after troubles began to emerge in crypto-focused bank Silvergate Capital.
At press time, Bitcoin is still down by nearly 5% in the last 24 hours to trade at $22396, data from coinmarketcap showed.
The dominant crypto along with the rest of such Ethereum [ETH], XRP, Cardano [ADA], and Polygon [MATIC], also suffered similar declines as the market gears for another jolt.
The reason behind the sudden drop in price, although cannot be exactly known, happened at the same time after Silvergate Bank announced its delayed annual 10-K financial report.
Besides the deferred annual report, the crypto-focused lender also informed that it was assessing its capacity to continue operating, leading its shares to fall by more than a quarter in after-hours trading.
Silvergate reported a loss of $1 billion in the fourth quarter as panicked investors rushed to withdraw deposits in the wake of crypto exchange FTX’s bankruptcy.
Users are once again reminded of the fragility of confidence in digital assets by the bank’s most recent problems.
The bank said it would not be able to meet an extended March 16 deadline for submitting its annual report.
In a further revelation that signals that the bank could be worse than well-funded, it revealed that it had sold additional debt securities to settle debts this year, according to a filing to the Securities and Exchange Commission.
It needs to be mentioned that Federal prosecutors in Washington are investigating the La Jolla, Calif.-based Silvergate and its dealings with the now-defunct FTX and trading firm Alameda Research.
This January, three U.S. senators asked Silvergate to provide details about its risk management and FTX.
On 2nd March, crypto heavyweights and clients of the beleaguered bank- Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy Digital, and Gemini have now distanced themselves.
Bitcoin Might Fall Into Further Correction Due To This
Days after cryptocurrency derivatives provider LedgerX made a similar announcement, these firms said they would halt ACH transfers and other commercial dealings with the bank.
Another source of volatility in Bitcoin could be the recent market reaction to additional bad news from the United States.
In the month of February, the nation’s manufacturing sector shrank for the fourth consecutive month, and consumer confidence dropped last month as well.
The manufacturing index for the ISM’s monthly report was 47.7, and normally any value below 50.00 indicates contraction.
