Bitcoin Holds Up After 58% Drop, Silvergate Falls Today?

Bitcoin Holds Up After 58% Drop, Silvergate Falls Today?

Bitcoin’s price is down 4% in the past 24 hours, with most of these losses occurring within 1 hour. This drop seems to coincide with rumors of the collapse of Silvergate, a major crypto bank.

Meanwhile, Crypto.com, Coinbase, Gemini and Galaxy Digital cut ties with the bank and Silvergate shares fell 58%.

Bitcoin collapses

The chart below clearly shows that traders lost their way at 03:00 Dutch time.

While most of us were enjoying a good night’s sleep or dancing over a beer night at the local college bar, Bitcoin’s price has lost more than $1,000 in value.

Bitcoin is currently trading for just over $25,000. Due to the decline, long positions of more than €70 million have been liquidated. Investors put money into a higher price, but the drop wiped out many of those bets.

Silvergate loses the circle

Although there were reports about the goings-on at Silvergate, the crypto bank in question, they started yesterday with a tweet from Circle. Circle is the issuer of USDC, one of the most popular stablecoins on the market.

Circle Internet Financial announced on Twitter that it has acquired certain services from US cryptocurrency bank Silvergate Capital Corp.

Silvergate does not meet reporting requirements

Silvergate for its part announced on Wednesday that it had not met certain requirements. On March 16, they are supposed to file a $10,000 report with the US Securities and Exchange Commission. The crypto bank has announced that it cannot comply with this.

A 10K is a comprehensive report that must be submitted annually by a publicly traded company on its financial performance. The report contains much more detail than a company’s annual report that is sent to shareholders.

What does a 10K report say? This includes history, organizational structure, financial statements, earnings per share, subsidiaries, executive compensation and other relevant data.

The SEC requires this report to keep investors informed about a company’s financial condition and provide them with sufficient information before buying or selling company stock or investing in the company’s corporate securities.

Share drops 57.7%

Failure to meet the due date must be reported to the SEC. In this announcement, Silvergate writes:

“A number of circumstances have occurred that will adversely affect the schedule and unaudited results previously reported in the earnings outlook, including the sale of additional investments beyond what was previously anticipated.”

Following the announcement, Silvergate shares fell 57.7% on Thursday and major companies ended their business with the bank.

According to its January earnings report, the company posted a net loss of $949 million in 2022 and a net profit of $76 million in 2021. The company attributed the losses to a crisis of confidence in the industry.

When U.S. banks go bankrupt, they usually go bankrupt on Friday night. An FDIC team comes in and collects the keys so their experts can work through the weekend and secure the customer base the following Monday. They typically transfer deposits to a new owner for management and then look for buyers for the remaining assets.

It’s going to be an exciting day!

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Source: Btc Direct

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