• Bitcoin price dropped 5% in 60 minutes on March 3, wiping out $22 billion from its market cap
• The drop is linked to the controversy regarding crypto-friendly bank Silvergate Capital and increased US regulation of crypto firms
• Other major cryptocurrencies, such as Ether and XRP, also suffered a similar decline
Bitcoin Price Drops 5% In 60 Minutes
The price of Bitcoin (BTC) fell more than 5% from $23,500 to $22,240 in just over 60 minutes on March 3rd. This wiped out $22 billion from Bitcoin’s total market capitalization, leaving it at $430.9 billion according to Cointelegraph Markets Pro. Ether (ETH), XRP (XRP), Cardano (ADA) and other non-Bitcoin cryptocurrencies also experienced a sharp decline.
Cause of the Drop
Markus Thielen, head of research at digital asset platform Matrixport, believes that this sudden price drop is due to two main factors: the recent Silvergate Bank controversy with its delayed annual 10-K financial report filing and an increased effort by United States regulators attempting to restrict ties between banks and crypto firms.
Silvergate Bank Controversy
The Silvergate Bank controversy began when the bank failed to file its annual 10-K financial report on time. This sparked uncertainty in the cryptocurrency industry about fiat on-and-off ramp services offered by the bank.
Increased US Regulation
In addition to the Silvergate Bank controversy, there are wider industry concerns that U.S. regulators are trying to cut off further banking relationships between crypto firms and FDIC-insured banks. These efforts aim at increasing regulations around cryptocurrency investment activities in order to prevent fraud or misuse of funds by investors or traders.
The sharp decline in Bitcoin’s price was due to both the Silvergate Bank controversy and increased US regulation towards cryptocurrency firms and activities. As a result of this news, other major cryptocurrencies such as Ether (ETH) and XRP (XRP) also suffered a similar decline in their prices.