Crypto Futures Liquidated Exceeding $200 Million after Silvergate Incident
The cryptocurrency market has experienced a significant dip once again with all major projects in the red. Bitcoin’s value fell 4.8% while Ethereum experienced a 5% drop. The global market cap fell 4.8% in a 24-hour period, reaching $1.07 trillion. Over $200 million worth of long crypto futures were liquidated, with Bitcoin experiencing the highest liquidations. Ethereum followed, with Dogecoin and Litecoin also experiencing significant liquidations.
The market crash was instigated by questions raised about crypto-friendly bank Silvergate’s ability to continue its operations, leading to a delay in filing with the SEC and a plummet in its stock price by over 50%. Speculations arose when Silvergate recorded a $1 billion net loss in Q4 2022 following the collapse of cryptocurrency exchange FTX. The US Department of Justice has begun looking into transactions between Silvergate and FTX, although no misconduct has been claimed.
Several businesses have claimed they have no exposure to Silvergate. However, the bank still handled over $3.8 billion in client deposits in Q4 2022, a steep decline from $11.9 billion in Q3 2022. At press time, Bitcoin was trading at $22,358.25, while Ethereum was trading at $1,566.54.