The dominoes are continuing to fall in the crypto sector. Bitcoin has lost around 10% of its value since yesterday.
Bank woes
The crypto market is carrying on with its sell off as vitally important banks go under or teeter on the brink. Since Silvergate has gone down, the heat has transferred to Signature Bank, while SVB Financial Group saw its shares fall more than 60% on Thursday.
While not directly linked to crypto, SVB is a bank that has partnered with nearly 50% of all the healthcare and tech VC startups in the U.S. over the last year.
The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.
— Bill Ackman (@BillAckman) March 10, 2023
Other headwinds
Within the crypto sector Kucoin is the latest exchange to come under fire from authorities as the New York attorney general sues to stop “illegal activities including the offering of securities and commodities”.
Other headwinds also buffet the industry, and to highlight just another of them, the U.S. government has transferred $1 billion in bitcoin recovered from a dark web hack. According to Coindesk, 10,000 BTC was transferred to Coinbase, while another 41,000 BTC was moved to government-controlled wallets. The sell-off of these BTC will certainly add to more downward price pressure.
Bitcoin has made its way down to $19,600 at time of writing. The 61.8 Fibonacci level is at $19,200, and with so much selling activity taking place it’s not sure if the price will even stop there. Sunday’s weekly close will be very important for throwing light on where bitcoin might go next.
Ethereum a security?
Ethereum is falling, and has its own problems to navigate. Chief among these is the news that the New York attorney general filing against Kucoin contains the claim that ETH is a security. The statement read:
“This action is one of the first times a regulator is claiming in court that ETH, one of the largest cryptocurrencies available, is a security. The petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
