The entire cryptocurrency market experienced a significant dip, with Bitcoin plunging by more than 10%, as investors reacted to the news that Silvergate Bank has decided to stop providing services to some of its crypto clients.
Other cryptocurrencies such as Ethereum and Dogecoin also suffered major losses during the selloff, with Ethereum dropping by nearly 15% and Dogecoin losing almost 25%. While it is unclear how long this market correction will last, it serves as a stark reminder of just how volatile cryptocurrencies can be.
The digital-asset industry is grappling with the ramifications of the troubles at crypto-friendly US bank Silvergate Capital Corp., which, in a recent announcement, has stated that it is currently assessing its viability. Silvergate offers a widely used payments network that facilitates the instantaneous transfer of funds between crypto firms. Unfortunately, however, numerous digital-asset exchanges, stablecoin issuers, and trading desks have stopped accepting or initiating payments through Silvergate.
John Toro head of digital-asset exchange speech to Silvergate
“Silvergate is one of the primary US dollar banking providers for the crypto industry,” said John Toro, head of trading at digital-asset exchange Independent Reserve.
“Any issues with liquidity could have a direct and tangible impact on market conditions and may limit customers’ access to their own funds.”
This decision has cast a pall of uncertainty over the industry, prompting many to reassess their investments in digital currency. The selloff was further exacerbated by reports that US regulators are cracking down on some of the larger exchanges. This caused panic among investors who worry that this could lead to further restrictions and regulations in the future.
