The last time the global cryptocurrency market capitalization traded below the $1 trillion mark was in late January.
The global crypto market capitalization has fallen below the $1 trillion mark for the first time since late January. Global market capitalization plunged 9.5% from $1.01 trillion on Wednesday to a two-month low of $914 billion on Friday. This was as a result of an extensive bloodbath brought about by certain troubling events.
The Silvergate Bankruptcy
Silvergate Capital, the parent company of cryptocurrency-focused Silvergate Bank, Announced on Wednesday that the bank would go out of business and file for bankruptcy, citing exposure to FTX. The disclosure came shortly after the bank delayed its annual 10-k filing with the SEC.
KuCoin Demand and ETH Security Label
Another worrying event is the lawsuit against the prominent KuCoin exchange. New York Attorney General Letitia James level charges against the exchange on Thursday, alleging that it offered unregistered securities to New York residents.
The Attorney General alleged that assets like Ethereum (ETH), which KuCoin offers, are classified as securities. Concerns were raised as this could set a precedent for ETH and other crypto assets to be labeled as unregistered securities in the US.
Huobi Token Flash Crash
On Thursday, Huobi Token, the native token of the Huobi exchange, plunged more than 90% in a flash crash event that got investors talking. As highlighted Per DB, the asset sank to a low of $0.91 briefly before recovering.
Voyager Closeouts
As previously reported, bankrupt lender Voyager has been persistently selling millions of assets since the beginning of the year despite the go-ahead given to Binance to acquire its assets. The lending firm has liquidated $358 million in assets since January.
The Silicon Valley Bank implosion
- Advertisement -
In addition, Silicon Valley Bank (SVB), one of the largest banks in the United States, collapsed on Friday after a bank run sparked by investor concerns.
Circle, the issuer of USDC, revealed as of today it has a $3.3 billion exposure to SVB. Assets represent 8% of your $40 reserves.
Binance had revealed that it would suspend the automatic conversion from USDC to BUSD, citing market conditions. The exchange even more revealed who has no exposure to SVB. Coinbase too decided to temporarily suspend USDC/USD conversions.
Shortly after these revelations, the USDC decoupled from the dollar, collapsing to a record low of $0.87 at 07:00 (UTC). Despite a slight recovery, the asset is still trading below the dollar, currently changing hands at $0.90, down 9.48%.
In addition to Circle, bankrupt crypto lender BlockFi revealed a $227 million exposure to SVB in a recent bankruptcy filing. Fox Business journalist Eleanor Terrett also revealed that leading venture capital firm a16z had SVB as a banking partner. The firm has neither confirmed nor denied exposure to BLS.
- Advertisement -
