Crisis Of Silvergate Bank Causes A Major Pullback In Overall Crypto Market Valuation

The overall cryptocurrency market valuation has been moving downwards in recent weeks. This is the reason why the performance of the overall cryptocurrency market was not well throughout the month of February.

The month of January was full of surprises for the entire cryptocurrency market as most of the cryptocurrencies grew tremendously in value.

It was in January when the overall market valuation of the cryptocurrency industry rose from a low of around $750 billion to more than $1 trillion.

However, the same phenomenon was not witnessed in the month of February. The data shows that the overall market valuation of the cryptocurrency industry only rose by 4% in the particular month.

Given the performance the cryptocurrency market delivered in the initial month of 2023, February has not been much impressive.

March is Full of Fears

Due to the February performance, the overall cryptocurrency market was concerned about the future of the market throughout 2023.

They feared that the industry may once again face the same situation and downfall as the year 2022. Given the recent developments in the crypto industry, it seems that their fears might be coming true.

The latest reports suggest that the cryptocurrency communities have grown very concerned about the recent developments involving the Silvergate Bank.

The entire community is fearful of the controversy that has surrounded the Silvergate Bank, which is impacting the overall cryptocurrency market.

There is great fear brewing among the cryptocurrency communities involving Silvergate Bank. The troubled lending bank is facing regulatory scrutiny and there are claims that it may end up going bankrupt.

It must be kept in mind that several major partners of the bank from the crypto world have already left its side. They are in the process of exiting the bank and their accounts will be closed very soon.

Among the entities exiting the lending bank is Coinbase, the second-largest crypto exchange in the entire world. This has compelled many other crypto firms to join the same group that is now leaving the bank.

Due to recent developments, the overall market valuation of the cryptocurrency market has become very volatile. From the looks of it, things may not end well for the cryptocurrency industry as the month comes to an end.

Bulls to Retreat from the Bullish Pattern

Prior to the Silvergate Bank controversy, the cryptocurrency market was headed in a bullish trajectory despite the dull performance in February.

However, given the recent developments in the crypto market, the bulls may not side with the bullish patterns and predictions.

Once again, the cryptocurrency industry is finding itself facing somewhat of a similar situation as it did back in November 2022.

There is another entity (Silvergate Bank) that is on the verge of closing down due to a controversy. If the bank goes bankrupt, it would only make things worse for the entire crypto market.

The firms will have their funds stuck and frozen at the lending firm until the bankruptcy is resolved. It is clear that even if the firms do get their funds back, they will not be the full payments.

Due to the growing fear, investors have started to pull out from their investments in cryptocurrency exchanges. They do not want to face the same situation as they did in November.

Therefore, the exchanges are witnessing huge withdrawals that have caused the entire market to suffer tremendously.

Impact on Crypto Market Valuation

The latest data for the overall cryptocurrency market capitalization shows that it has suffered a substantial decline since February 24.

The report shows that the weekly decline recorded for the cryptocurrency market valuation is 4%. The major contributors to the decline were Bitcoin and Ethereum.

These tokens reportedly suffered from at least 4.5% losses in the same period. Even several other major cryptocurrencies such as BNB, XRP, LTC, and many more have suffered losses as well.