Last week was mainly bearish with many macros events it was harmful effect on Industry. Major developments such as voluntary liquidation of Silvergate f crash of Silicon Valley Bank (SVB) disrupted the industry, which led to this in sale-off that paid asset Prices are at their lowest in several months. In addition, regulatory efforts in The United States was mostly unfavorable, exacerbating fears and uncertainties.
Voluntary liquidation of Silvergate
Two weeks ago, concerns about the stability of Silvergate escalated after bank postponed His annual 10k filing with the US Securities and Exchange Commission (SEC). the decision raised concerns about this possibility of Insolvency and its potential impact on encryption.
Silvergate saga Extended to the previous week, fetch new developments. As bank, its troubles continued amid the revelations of Bankruptcy fears rose due to poor stock performance and mass withdrawals of last week.
after these eventsAdditional reports have emerged indicating that Silvergate Capital, parent a company of Silvergate, I got into discussions with The US Federal Deposit Insurance Commission (FDIC) to plot a course through current disturbance. Anonymous sources revealed that securing investments is important market players He was one Possible option Under consideration.
but, on March 10, Silvergate Capital made a public A statement stating its intention to cease operations and liquidate it voluntarily bank’s assets for they best interest. After that, Silverjet stock fell 43%. in after-hours trading.
In the aftermath of these eventsCryptocurrency exchanges Binance and Coinbase revealed that they had reported the community that they had zero Exposure to Silvergate. Meanwhile, speculation arose regarding true catalyst for The bankfall. Industry insiders suggest so government regulatory Initiatives may have contributed.
organizational uncertainty in The United States abounds
the regulatory climate in The domestic crypto industry within the United States also remains A concern among leaders. past weeks events It exacerbated these concerns though emergence of potentially favorable discussions.
Ethereum (ETH): a security or a commodity?
New York Attorney General Letitia James revealed on March 9 that a lawsuit has been filed against KuCoin, a cryptocurrency exchange, for Providing security investments for residents of New York without compliance with state registration requirements.
According to Attorney General James, assets Like ETH is, in fact, the securities along with terraUSD (UST) and terra (LUNA). revealed plans to step up on regulatory crack efforts down on Exchanges are constantly violated financial Laws and put investors in risk.
Position of Attorney General James on Whether ETH should Classified as a security or commodity that could set a US precedent financial may agencies use to take action against Local cryptocurrency exchange list the currency.
Gary Gensler, President of The Securities and Exchange Commission has proposed on Multiple occasions assets using the proof-of- The consensus mechanism is the stock. However, ETH is not explicitly designated as such. In a recent statement, he hinted that every cryptocurrency assetexcludes for bitcoin (BTC), should To be treated as collateral, more point of view bitcoin extremists support.
However, during a Senate hearing on March 8, Rustin Behnam, Chair of The Commodity Futures Trading Commission (CFTC) has reiterated its position that ETH and all stablecoins are commodities, not securities. As such, Behnam believes so assets fall under jurisdiction of his agency.
last regulatory affairs
United State regulatory Scene also Some welcomed new developments last week. according to last Reports Tuesday, Policymakers in The country, led by Patrick McHenry, chairman of the House Financial Services Committee, and Representative Richie Torres, is seeking to reintroduce legislation to clarify the reporting.
Brian Armstrong, CEO of Coinbase, agreed of Bill introduced by McHenry and Torres and commended the cast for they work in Strengthen regulatory Transparency. He believes the legislation will be effective in Preserving the position of the United States as a center of Cryptocurrency innovation, in particular in the face of Unfavorable legislative actions that threaten the survival of the industry.
Meanwhile, Kristi Noem, Conservative of South Dakota, he opposed House Bill 1193, which he seeks to disqualify bitcoin and other cryptocurrencies assets from definition of money. Noem cited a possible loophole in the bill that could enable government To marginalize cryptocurrencies and position central bank currencies as the only viable avenue digital asset.
Biden administration also Submit an idea for a 30% tax. on Crypto miners in Country. proposal, provided in The Biden administration’s public finances for 2024 year budgetMiners will be required to pay a 30% tax. on Electricity use. The idea has received widespread backlash within the cryptocurrency community.
Silicon Valley bank collapse and infection
Silicon Valley Bank (SVB), one of The largest US banks by assetsHe falls last week, causing jitters in the markets that affected crypto companies with exposure to the lender.
The bank is fast decline happened over A brief two-day period, initiated by revelations of his intention to raise $2.25 billion from investors to address a large shortfall in their public budgets. this announcement Get startup clients to check out assets as a precaution against potential exposure to bank in the event of Collapse.
the bank run yielded in Liquidity crisis. Silicon Valley Bank revealed that it sold the bonds at a significant loss of $1.8 billion due to recurring interest rate Increases implemented by the Federal Reserve. SVB clients are primarily high level venture Backed by capital technology companies and professionals in the tech industry.
the aftermath of these events Inventory hurts the market with shock waves also Feeling in Cryptocurrency industry. California regulators were forced to shut down the bank on March 10, designating the Federal Deposit Insurance Corporation (FDIC) as the recipient to handle the disposal of the bank’s assets.
Circle and BlockFi show SVB
The day after SVB’s collapse, the department issued a statement of USDC stablecoin revealed that they have been trapped bank. According to the tweet on March 11, the department revealed that $ 3.3 billion of Its reserve of US$40 billion has been preserved in Silicon Valley Bank is now inaccessible.
Panic gripped the encryption scene, with Some USDC holders are scrambling to convert USDC coins to other stablecoins. However, two of The largest crypto exchanges, Binance and Coinbase, have suspended the transfer of USDC. Binance suspended the file auto-transformation of USDC to BUSD, while Coinbase announced It will pause the conversion of USDC to USD. Robinhood also USDC deposits and withdrawals have reportedly been suspended.
Like these events Unfolded, USDC value detached from dollaras it fell to $0.87 on Saturday morning. the asset Since then, it has rebounded by 4.42%. in the past 24 hours. However, it still has to achieve parity with The dollar and currently trading for $0.95 at the time of reports.
Meanwhile, bankrupt crypto lender BlockFi exposed in File bankruptcy last Friday that it has $227 million exposure to Silicon Valley Bank. The documents revealed that BlockFi’s exposure is not also Insured by the FDIC and not covered by anyone else financial an agency.
Market bloodbath
While the Silvergate and Silicon Valley banks wreak havoc, the broader cryptocurrency market posted Huge declines for the total encryption market hat below $1t tag for the first time since january.
The situation was exacerbated by heavy selling pressure from BTC miners who They began to liquidate their property. According to a report from CryptoQuant on March 9th bitcoin Miners reserves hit its lowest since October 2022. This added to already the challenge market conditions, exacerbating the effect on cryptocurrency market.
Subsequently, bitcoin Projection below $20,000 on March 10th birthday first the time asset was traded below $20,000 since mid-January. last assets also It experienced similar lows, and it fell to its lowest lows last to attest in January. despite of struggling to regain the $20,000 region, bitcoin Finally closed the week with 8.4% decline. Moreover, Ethereum ended the week with 6% drop.
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