Bitcoin Falls a Fourth Day as Silvergate Troubles Weigh on Crypto
Bitcoin fell for a fourth day, sending the world's largest cryptocurrency to the lowest in nearly a month as sentiment in digital assets sours following the collapse of yet another onetime industry mainstay.
The digital token fell as much as 2.7% on Thursday before recouping some losses to trade at around $21,500. Other tokens such as Ether also edged lower.
Renewed turmoil in an industry already rocked by a series of blowups has put some investors on edge. The latest causality involves crypto-friendly bank Silvergate Capital Corp, which announced plans Wednesday to wind down operations and voluntarily liquidate its bank. Its unraveling comes at a time of heightened regulatory scrutiny of the industry.
“It's hard to make a fundamental argument for crypto here, just given all the uncertainty — you don't know what regulation is coming down the pike,” said Kara Murphy, chief investment officer at Kestra Investment Management.
Across global markets, investors are also digesting the likelihood of higher borrowing costs — particularly in the US, as central bank officials aggressively work toward reining in surging inflation. That backdrop does not bode well for riskier investments like digital assets.
Spot volumes have dropped recently and are at two-month lows, down 21% in the past seven days, according to Vetle Lunde, senior analyst at K33 Research, which was formerly known as Arcane Research. The volatility in the past week was concentrated around one brief, sharp selloff last Friday as Silvergate's troubles mounted, Lunde added, which “naturally disincentivizes” market activity.
Yet some market-watchers have noted that recent negative news hasn't been hammering crypto prices as much as they have in the past.
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