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Bitcoin (BTC) is down 4.5% in the past 24 hours, dropping from $23,500 to a two-week low of $22,259 in the early hours on Friday before climbing to around $22,390 by press time, data from CoinGecko shows.
The leading cryptocurrency last traded at these levels on February 15, with the latest price action wiping out $20 billion of Bitcoin’s market cap, which now stands at $431 billion.
Ethereum (ETH) followed suit as the market’s second-largest cryptocurrency fell 4.6% over the day, changing hands at $1,569 at the time of this writing.
The market capitalization of all cryptocurrencies shed about $48 billion overnight, currently standing at $1.077 trillion, per CoinGecko.
Silvergate drags crypto
As for the reasons for the latest sharp decline in prices, it can likely be attributed to the recent developments surrounding Silvergate Bank, which has been providing a payment network for many crypto businesses.
Alarm bells rang on Wednesday when the California-based company delayed publishing its annual 10-K report, saying that further unreported losses could mean the bank is "less than well capitalized."
Silvergate, which also worked with the now-bankrupt crypto exchange FTX and its sister trading firm Alameda Research, previously reported a $1 billion net loss as well as a decline in customer deposits of roughly $14 billion in the last quarter of 2022.
To fund the wave of withdrawals it faced during that time, the crypto-friendly bank secured a $4.3 billion loan from the Federal Home Loan Bank and sold around $5.2 billion in debt securities.
On Wednesday, Silvergate, however, admitted that it was assessing the impact of its recent losses and determining "its ability to continue as a going concern."
As many crypto companies, including LedgerX, Coinbase, and Tether, among others, moved to either distance themselves from Silvergate or to completely cut ties, the company’s stock went into free fall, plummeting a staggering 57% to hit an all-time low of $5.72 at closing bell on Thursday.