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Bitcoin fell to a near-two-week low on Friday morning amid the latest decline in the broader crypto market after key crypto bank Silvergate Capital (NYSE:SI) warned it might not survive the storm. The world’s biggest cryptocurrency was down more than 4.3% at $22.395 at the time of the writing. Other crypto tokens, including Ether, Cardano, and DOGE, are also in the red, plunging 4.4%, 4.1%, and 5.8%, respectively.
The latest blow to the industry comes as investors are concerned about a potential collapse of Silvergate. This US bank was once seen as a vital pillar of the crypto banking ecosystem. Silvergate manages a comprehensive payments network facilitating real-time fund transfers between crypto firms.
Earlier this week, the bank said it needs additional time to complete its annual report and warned investors that it may be unable to stay afloat. Silvergate said on Wednesday it is delaying its annual 10-k filing because it must respond to requests from independent auditors and accounting firms, in addition to “regulatory and other inquiries and investigations that are pending.”
This resulted in several high-profile crypto firms cutting ties with the bank, including Coinbase (NASDAQ:COIN), Crypto.com, Paxos, Circle, and Bitstamp, among several others. The bank’s stock fell as much as 57% on Thursday to $5.72.
Friday’s decline represents another setback for the troubled crypto market after a decent rally in February that took Bitcoin above the $24,000 mark. Following a dreadful 2022, arguably one of the worst years for crypto, the market had a solid start to 2023.
However, this recovery rally has been hindered after the US regulators and lawmakers started cracking down on crypto firms, raising fresh concerns among investors. Last month, the Securities and Exchange Commission (SEC) charged crypto exchange Kraken with breaching US securities law, forcing it to shut down its staking service and pay a $30 million fine.
Things did not improve following Silvergate’s announcement this week, leading to further uncertainty. Investors are now increasingly worried that the bank could completely collapse and the potential implications that would have on the broader crypto market.
Disclaimer: This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.
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