Silvergate and SVB push Bitcoin below $20,000
After the Federal Reserve sent a first warning this week that interest rates in the US can still be higher in order to slow down the economy and thus bring inflation down, there is now also the (self-elected) bankruptcy of the Silvergate bank, who was the official banker for many crypto companies in the US. In the broader American stock market there was widespread worry about financial group SVB, which caused US stocks to slide, especially banks. The combination of those two issues once again causes lower prices on crypto markets.
Bitcoin in March
The $22,000 level, which was seen as a strong support level, broke as news of the Silvergate bankruptcy spread.
In light of recent developments in the industry, we believe that an orderly wind-down of banking activities and a voluntary liquidation of the bank is the best solution, the company said in a statement. The bank’s liquidation plan includes a full repayment of all deposits.
Investors told Reuters yesterday already that a further fall to $20,000 is a possibility if the links between crypto companies and Silvergate become better known, but much will also depend on the strength of the latest US job data, due on Friday.
They have been proven right overnight. At the time of writing, Bitcoin is trading at $19,900.
Analyst Michael van de Poppe, tweeting under the moniker CryptomichNL, said Federal Reserve Chairman Jay Powell was a little too confident in the possibility of the almighty US dollar.
Powell says; ‘We’re the largest economy, we can service the debt.’— Michaël van de Poppe (@CryptoMichNL) March 8, 2023
That’s what countries said just before they collapsed. Always.
Short the Dollar. Buy #Bitcoin.
Michael, who at the beginning of last week expected Bitcoin to quickly jump to $30k, now tweeted: “short the dollar, buy Bitcoin.”