Summary
- Bitcoin price dropped 5% in a span of 60 minutes
- The drop was attributed to uncertainty surrounding Silvergate Bank's decision to stop onboarding new customers
- The news caused a selloff of Bitcoin, resulting in the price drop
Bitcoin (BTC) has seen a sharp 5% drop in price in the early hours of March 3rd, wiping out $22 billion from its total market capitalization. The sudden decrease has caused a wave of uncertainty among crypto-friendly banks, such as Silvergate Capital, which recently delayed its annual 10-K financial report filing.
The exact cause of the $1,200 price drop is still unclear, but analysts believe it could be linked to the Silvergate Bank controversy and increased efforts by US regulators to restrict ties between banks and crypto firms. Markus Thielen, the head of research at digital asset platform Matrixport, said that the drop is due to the “continuous fallout from Silvergate bank as there is now more uncertainty about fiat on-and-off ramp.”
He added that “there are now wider industry concerns that US regulators are trying to cut off further banking relationships between crypto firms and FDIC insured banks.” This could be playing into the hands of Hong Kong and China, which are becoming more crypto-friendly.
Several technical analysts on Twitter claimed to have predicted the fall from $23,000 resistance, but the reasons causing the push down are still not clear. The last time BTC was priced at $22,250 was February 15th.
Despite the sudden decrease, BTC is still up 34.8% since it was priced at $16,550 on January 1st. It is unclear how the market will react to the sudden drop, but investors should remain cautious as the situation continues to develop.