The price of bitcoin fell today due to the collapse of the Silvergate cryptocurrency bank coupled with a cascading liquidation of long positions.
According to the Cryptocurrency Screener Cryptovizorwhich determines the market price of BTC / USD based on the results of trading on the largest spot exchanges, on the night of March 3, the cryptocurrency rate fell by more than 5% in one hour.
Collapse of Silvergate
The fall occurred under pressure from the news about the Silvergate cryptocurrency bank, whose shares collapsed by almost 50% amid the refusal of the main exchanges to cooperate with it.
Silvergate suffered as a result of the collapse of FTX, having lost sufficient capitalization because of this. The collapse of the bank began with the fact that he lost the largest US exchange Coinbase as a client. Then Crypto.com and other companies followed Coinbase’s example.
Analytical resource Kobeissi Letter so described the chronology of the collapse of the cryptocurrency market today:
- Coinbase Suspends Silvergate Payments
- SEC Says Cryptocurrency Exchanges Are ‘Unsafe’
- Crypto․com Suspends Silvergate Payments
- FTX confirms $8.9 billion shortfall
- Crypto loses over $200 million in a few hours
The collapse of Silvergate was an occasion for crypto enthusiasts to recall the frailty of banks and the inviolability of bitcoin. Blockstream CEO Samson Mow wrote on twitter:
The collapse of Silvergate and the abandonment of exchanges does not affect bitcoin. The discontinuation of exchanges by the fiat banking system will mean that buying and trading will move to P2P. Just like in China. There is still a robust P2P trading ecosystem without exchanges.
Cascade of liquidations
Meanwhile, the trading resource Skew informedthat bitcoin’s fall was triggered by a large sell-off in the spot market on the market, as a result of which a cascade of liquidations of long positions began. According to Coinglassover the past 12 hours, the volume of long liquidations exceeded $205 million.
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