Bitcoin dropped to the lowest level in about two weeks, part of a wider retreat in crypto markets as investors digested the unraveling of a key industry payments network. Bloomberg’s Yuequi Yang reports.
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Well we saw a big rally in equity markets here but crypto Market’s sitting this one out they’re struggling to power through the implosion of silvergate capital the bank well it’s one of the main banking providers for the crypto industry and well it’s been hurt big time because of it Bitcoin hitting the
Two-week low today for more uh let’s get it bring in a Bloomberg news reporter usually Yang to talk a little bit more uh of what’s going on and I mean there was so much that happened this week in the crypto space particularly with the companies that are weighted to it we’ll
Start off with silvergate they basically bet their fortune on the crypto world and of course we saw the big statement that they had to come out with this idea here that well if everyone’s pulling their deposits and uh you know you just don’t really have anything to support
Some of the Investments that they were making yes so what we’re seeing here is really this ripple effect starting from the Fallout of FTX collapse last November FTX was the main client for silvergate and ever since his bankruptcy there’s been concern about silvergate there’s we
Saw a bank run and then as you said this week they are coming out to announce that they couldn’t file their annual Valley on time they indicated risk of being investigated by the Department of Justice and they really talk about their internal evaluating if they can stay afloat and that really prompted concerns
By all the counterparties major crypto exchanges stablecoin issuers trading firms who all rely on silvergates platform to be able to sell real-time payment between each other well usually it felt like when the FTX Fallout kind of came out you did see essentially those players who kind of felt like
Dominoes essentially and then I want to say Gemini for me was the big one really all as this Fallout from three arrows Capital even before FTX how much more shoe dropping is there to go or is this it I think this one is unique because silvergate is really kind of a behind
The scene kind of company they provide a critical infrastructure for the crypto industry they don’t themselves touch crypto but they provide the ability for people to send real world US dollar into the crypto economy so now the concern is that whether that access might be curtailed or even be cut out for the
Crypto industry this has put in a lot of renewed Focus I think on how these companies were audited some of the oversight there and we know that the crypto industry is kind of weird because they didn’t have the same formal regulatory structure there may be other finance companies would they are still
Beholden to sort of public accounting rules here but when we talk about this idea of not knowing that silvergate was having these problems the idea that Finance still is having issues I guess proving some of the reserves and then of course some of the statements that we
Got out of Riot blockchain a marathon about uh maybe they Mis accounted for some of their impairments yeah so what we’re seeing now is really this intense regulatory scrutiny over the industry especially coming from the Federal Banking regulators and as a result all these companies they have to look at
Their the financial access they look at they have to look at their accounting the weight of the records for books and we expect to see more Fallout and signals coming from Washington DC on this but this isn’t a a done deal here silvergate still said that look we’re
Still figuring out a way to stay in business how did they do that so they are still taking time to to be able to submit more information to their accounting company they told us that they’re working to be able to file their 10K annual value as soon as possible I
Think meanwhile the crypto industry really just can’t sit out and wait on some of the biggest crypto companies are already announcing that they are suspending the wild transfer with silvergate people in the industry are talking about trying to find an alternative for silvergate which we know has been hard because silvergate is
Really one of the few banks that were able to provide this service to begin with we talk about sort of the big collapse in crypto prices and we’ll just take Bitcoin because obviously that’s the main proxy here coming down from that high back in 2021. but we saw this
Resurgence up for a few weeks kind of back up to around that 20 above 20 000. I think it made a run for 25. there are a lot of people that say the fact that it never really collapsed down because remember there are all these thoughts everyone’s like oh this is going back
Down to you know a thousand or something ridiculous and we never got there is that an encouraging sign is there a price action that you’re watching that gives maybe some signal that there is sort of a floor to this right now yeah so I think we did see a rally in Bitcoin
Prices although now that bitcoin price is really being heard by this silvergate sentiment in the industry at the earlier earlier last month I think the sentiment is more optimistic in the industry we heard the industry leaders like Michael Noble grass talking about even thirty thousand dollars a price point for
Bitcoin but now of course we’re still pretty far away from that range
One by one the hackers see the bit coin world collapsed in front of their eye. JP dudes created it and the Chinese dudes finish it.
How dangerous CH could be? Extreme!
They made the jugular (FTX and Silvergate) and then cut it. This was planned from the beginning. If you think this was just some random accident then I have an NFT to sell you..😂
"First they ignore you, then they laugh at you, then they fight you, then you win” We are in the "they fight you" stage.
Maybe North Korea could be the bank.
First Cryptocoin Dev: "Hey, want to exchange your hard earned money for fake digital money?"
"Well, its tradable so you'll have charts and based on our chart that we drew with the buyer and seller being ourselves, the price have gone up. You might miss out on possible future price increase."
"What's the benefit?"
"Well, you can buy the fake digital money and send it to someone else. And if that someone else manages to sell the fake money to a greater fool at or above your cost, then its basically remittance without the fees."
"What if the price goes down?"
"Then you HODL"
"HODL as in How Only Dimwits Listen?"
"No, HODL as in a misspelling of HOLD because we can't legally tell you to hold an illegally issued digital security masked as currency when prices are clearly going down due to it being intrinsically worthless"
"Our fake digital money will be limited in quantity but the kinds of fake digital money is unlimited. In fact, it's open sourced. Anyone can make their own fake digital money. Just change the name a little."
"I don't buy the premise"
"But don't you hate the government spending beyond their means and printing money and eroding the value of your savings"
"Well, you're in luck because we're not the government. Putting your savings in fake digital money will erode the value of your savings. But thank God we're not the government. We're decentralized so we can avoid legal regulations and responsibilities. When you lose all your savings, you'll have no way of getting it back"
"I don't catch your drift"
"Well, we built scientifically the most energy intensive mechanism that just simply store the data of who owns the fake digital money. This way, we get to destroy the environment as well! We sure pushed the boundaries of what is possible."
"That sounds terrible"
"Yes, but we named it after cute animals"
"Sold! Here take all my money!"
Cyrpto "It will all end badly" Warren Buffet.
silvergate is liquidating some btc to pay debtors, other debtors are accepting btc as payment. 30k next month, 1m in next 5 years
Nope. Options expiration and miner selling. Move on…
Bloomberg Television allows comments about Silvergate, but Yahoo Finance does not. Is there more to this story?
One day it the store of value, 2nd day its a bankruptcy
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