Silvergate Bank Liquidates, Sending Bitcoin Into a Bearish Channel

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Silvergate Capital, a major central lender to the cryptocurrency industry, announced on Wednesday that it is winding down operations and liquidating its bank.

“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of Bank operations and a voluntary liquidation of the Bank is the best path forward,” the company said in a statement.

The news sent shockwaves through the crypto markets and caused the stock to plunge more than 36% in after-hours trading. The liquidation of Silvergate Bank highlights the growing instability of cryptocurrency markets and their vulnerability to external forces, such as changes in regulations or economic conditions.

As one of the largest lenders in the asset class, Silvergate’s decision could have a significant impact on prices across different coins. It also signals a shift towards increased caution and oversight from lenders, who are increasingly cautious about lending money to crypto firms.

Silvergate Capital and Signature Bank of New York have long been considered the two leading banks for cryptocurrency companies. Silvergate has over $11 billion in assets, while Signature Bank holds even more with a staggering $114 billion.

Both banks have provided various services to crypto companies, such as loans, wire transfers, and foreign exchange trading. However, Silvergate’s recent announcement to liquidate its bank has sent shockwaves through the crypto markets.

This move could signal a shift towards increased caution and oversight from lenders increasingly hesitant to lend money to crypto firms. The decision highlights cryptocurrency markets’ growing instability and vulnerability to external forces, such as regulatory changes or economic conditions.

The implications of this news are still being felt across different coins as investors remain cautious about future investments in the asset class. It is unclear how this move will affect other central lenders in the industry, but it can be safely assumed that more caution will be taken when loaning money to crypto firms

In light of the news, many investors may be more likely to explore safer options like stable coins or other digital assets with underlying value.

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