Bitcoin started trading on Friday with a downward movement. Within an hour, the largest cryptocurrency fell from $23,400 in the early morning hours to $22,300, a drop of $1,000. During that time, Bitcoin’s market capitalization fell by $22 billion.
Silvergate And SEC Report Sent Markets Lower
Last night, the process became even more complicated when bitcoin bank Silvergate failed to file its report with the SEC and requested its suspension. First Coinbase and Circle, then Cryptocom and Bitstamp announced they were severing their ties with Silvergate.
MicroStrategy, the company with the largest bitcoin stake, also issued a statement saying it would not invest in Silvergate. The company stated that it received a $205 million loan from Silvergate in March 2022 and that the terms of the loan would not change in the event of Silvergate’s bankruptcy.
The uncertainty surrounding Silvergate caused Bitcoin to fall significantly for a short period of time in the early morning hours. The major cryptocurrency fell from $23,400 to less than $22,300 in less than an hour. During this time, Bitcoin lost $22 billion in market capitalization.
This Decline Had Been Expected
As you may recall, experts have long warned that Bitcoin’s value often falls after two consecutive months of growth. Bitcoin, which was $16,500 at the beginning of the year, is still 35% above that price.
Still, this decline should not be perceived as negative by anyone. After all, Bitcoin has mostly hovered around $20,000 lately. Perhaps it would be more accurate to interpret this $1,000 drop as follows.