Cryptocurrency markets: Silvergate Capital Corp. has announced that it is closing its business and going to make liquidation to make up for the loss. After this, there has been a huge decline of up to 10% in crypto.
Cryptocurrency markets: The cryptocurrency market is witnessing the biggest decline of this year. Silvergate Capital Corp, a crypto-friendly AMERICAN bank that gives great support to the crypto market, is behind the shock this time in a market that suffers a sudden setback every few months.
This bank has announced that it is closing its business and going to do liquidation to compensate for the loss. After this, there has been a huge decline of up to 10% in crypto. Bitcoin dropped 9% and reached this year's low. Bitcoin has fallen below $20000, which is the biggest decline of 2023.
Crypto bank Silvergate Capital will also stop operations in crypto banking
Silver Gate Capital will also shut down operations in crypto banking. After this decision, silver gate shares have fallen by more than 40%. The end of Silvergate is a matter of concern for the crypto industry.
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The total number of transactions on Bitcoin has declined by 17%. In the month of March, the average volume of Bitcoin has come down to about $ 25 billion, which was $ 36 billion for February. Trading volumes have come down drastically after Silvergate's problems.
What is the reason for silvergate's closure? (Silvergate Closure)
Silvergate reported a net loss of about $1 billion in the fourth quarter. Customer deposits fell 68% to $3.8 billion. Silvergate had to sell debt securities worth $5.2 billion to cover the withdrawal. The company also went to the Federal Home Loan Bank for an additional $4.3B.
Probe into Silvergate was the target of the investigation
Market regulators were investigating Silvergate. The company did not submit the annual report for the financial year December 31, 2022. For this, the company was given time till March 16, but the company decided to close its business before that.
The special thing is that the crypto exchange FTX was a major customer of Silvergate. In addition, investment firms like Citadel Securities and BlackRock recently bought 5.5% and 7% stakes in Silvergate.