Silvergate was once the bank of choice for many crypto exchanges and traders. It offered a unique service called SEN, which allowed instant cash transfers between crypto clients 24/7. But everything changed when Silvergate announced that it was suspending SEN and facing liquidity issues. What does this mean for the crypto industry?

source MSN Money

Finding New Banking Partners

First of all, it means that many crypto players will have to find alternative banking partners. This could be challenging, as not many banks are willing to work with crypto businesses due to regulatory uncertainty and reputational risk. Some may have to resort to offshore or unregulated banks, which could expose them to more fraud and hacking.

source Pexels.com

Facing More Volatility and Liquidity Crunches

Secondly, it means that the crypto market could face more volatility and liquidity crunches. Without SEN, crypto transactions will take longer and cost more. This could affect the speed and efficiency of arbitrage, trading and settlement. It could also create bottlenecks and delays in moving funds between exchanges and wallets. This could lead to more price swings and flash crashes.

source CoinMarketCap

Rethinking Reliance on Centralized Intermediaries

Thirdly, it means that the crypto industry will have to rethink its reliance on centralized intermediaries. Silvergate’s collapse shows that even a bank that claims to be crypto-friendly can fail or change its mind at any moment. The crypto community will have to look for more decentralized solutions that can offer faster, cheaper and safer payments without depending on third parties.

Conclusion

Silvergate’s downfall is a wake-up call for the crypto industry. It shows that crypto is still a risky and uncertain space that needs more innovation and regulation. It also shows that crypto is not immune to the problems of the traditional financial system. Crypto enthusiasts should be prepared for more challenges ahead.

source CNBC

#Silvergate #crypto2023 #Cryptocurrency #Bitcoin #SEN

#Bitcoin has been on a roll lately, breaking through $25,000 with high buying pressure in the market. Most major digital assets are in the green as #Asia starts its business day. Bitcoin is up 5.3% in the last 24 hours to $25,703, while ether is up about 2.8% to $1,697. Binance’s BNB token is up 8.7% to $331. This mini-crypto rally has caused a lot of excitement among crypto enthusiasts and investors alike, and it's not hard to see why.



Source Pexels.com

According to Kaiko’s Director of Research, Clara Medalie, the recent surge in crypto prices is due to low liquidity in the market and high buying pressure. Binance converting $1 billion of #BUSD to bitcoin, ether, #BNB, and other tokens was the fuel for the fire. “This is a huge amount of buy pressure on the markets,” Medalie said. “As the markets aren’t that liquid, any significant buying pressure is likely going to have a considerable impact on prices as a whole.”

But what does this mean for the future of Bitcoin and other digital assets? Is this the start of a new bull run or just a temporary spike? Let's take a closer look.



Europe and Asia: A Magnet for Liquidity Orphaned by the Collapse of Silvergate and Signature



Medalie also notes that Europe and Asia have a chance to be a magnet for liquidity orphaned by the collapse of Silvergate and Signature. “There are quite a few crypto companies actually based in Europe or APAC that have maintained their banking relationships, so it actually presents a pretty big opportunity for these regions to accept crypto businesses,” she said.

For example, Maicoin in Taiwan has a relationship with a large bank in Taiwan, which acts as a fiat pipeline for Maicoin. Even though Silvergate and Signature just went out of business, this shows that crypto companies can still do business in areas where they still have banking relationships.



Breaking Correlation Between Stocks and Crypto

Medalie also notes that the correlation between stocks and crypto is breaking, pointing to the divergence between crypto and equity markets at the start of the year and during this most recent rally. “It flipped this week." "We see crypto markets rallying, while equity markets have completely collapsed,” she said. “The divergence in these markets has flipped, and that’s being maintained, which is creating this decreasing correlation for both Nasdaq’s tech stocks and Europe’s 600 index.”

This is an interesting change because it shows that the crypto market is becoming more independent from traditional financial markets. If this trend continues, it could mean that cryptocurrencies are starting to be seen as a legitimate alternative investment.

Conclusion

Overall, it's clear that the recent surge in Bitcoin and other digital assets is due to high buying pressure and low liquidity in the market. This has caused excitement among crypto enthusiasts and investors, who are wondering if this is the start of a new #BullRun or just a temporary spike. However, it's important to note that the crypto market is still very volatile, and there are many factors that could cause prices to fluctuate.

That being said, the breaking correlation between stocks and crypto is an interesting development that suggests that cryptocurrencies are starting to be seen as a legitimate alternative investment. And with opportunities for crypto companies to operate in regions where they have maintained banking relationships, despite the recent collapse of #Silvergate and Signature, it's clear that there is still a lot of potential for growth in the crypto industry.

Only time will tell what the future holds for Bitcoin and other digital assets. But one thing is for sure: the crypto market is a fast-paced and exciting space



 

The world of #cryptocurrency is often viewed as being constantly in a state of flux, with rapid developments and changes occurring on a regular basis. In recent news, one major development that has caught the attention of the crypto world is the announcement by Silvergate Bank that it will be shutting down.

#Silvergate Bank, founded in 1988, is a financial institution that specializes in providing services to cryptocurrency-related businesses. The bank has been an important player in the world of crypto, providing a range of services such as custody, settlement, and lending to its clients. However, the bank has recently announced that it will be shutting down its operations.

The announcement by Silvergate Bank has caused concern among the crypto community, as it is one of the few banks that has been willing to provide services to cryptocurrency businesses. Many businesses in the industry rely on Silvergate Bank for their banking needs, and the news of its closure has raised questions about the future of the industry.

According to the announcement, the bank will be winding down its operations over the next few months, with the closure expected to be completed by the end of the year. The decision to shut down was reportedly made due to a number of factors, including a decline in the demand for its services and increasing competition from other banks in the space.

While the news of the closure may be alarming, it is important to note that the crypto industry has always been characterized by its resilience and ability to adapt to changing circumstances. It is likely that other banks and financial institutions will step in to fill the gap left by Silvergate Bank, providing the necessary services to support the growth and development of the crypto industry.

Furthermore, the closure of Silvergate Bank could potentially lead to the emergence of new players in the space, who may be better positioned to meet the needs of the industry. This could lead to increased competition and innovation, which could ultimately benefit the entire crypto ecosystem.

In conclusion, the announcement by #Silvergate Bank that it will be shutting down is undoubtedly significant news for the crypto industry. However, it is important to remain optimistic and recognize that the industry has always been characterized by its ability to adapt to changing circumstances. While the closure of Silvergate Bank may create some short-term uncertainty, it could ultimately lead to new opportunities and developments in the space.

#bicasso  #crypto101  #antiscam

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