• Bitcoin (BTC) dropped 5% from $23,500 to $22,240 in 60 minutes on March 3.
• This caused a loss of $22 billion from Bitcoin’s total market capitalization.
• The drop is linked to Silvergate Bank controversy and increased U.S. regulation attempts.
Bitcoin Price Drop
On March 3, the price of Bitcoin (BTC) fell more than 5%, going from $23,500 to $22,240 in just over 60 minutes. This wiped out nearly $22 billion from the cryptocurrency’s total market capitalization and other non-Bitcoin coins suffered similar drops as well.
Reasons for the Price Drop
Markus Thielen, head of research at digital asset platform Matrixport, believes that the price drop was caused by two primary factors: a wave of uncertainty concerning crypto-friendly bank Silvergate Capital and an increased effort by United States regulators attempting to restrict ties between banks and crypto firms.
Silvergate Bank Controversy
The recent controversy with Silvergate Bank has caused delays in its annual 10-K financial report filing which has added more uncertainty about fiat on-and-off ramping for cryptocurrencies. As such, this could have contributed to the sudden decline in Bitcoin’s value on March 3rd.
U.S Regulations Impacting Crypto Firms
Another factor that may have had an impact on the sudden fall of Bitcoin prices is a wider industry concern that U.S regulators are trying to cut off further banking relationships between crypto firms and FDIC-insured banks which would make it difficult for these companies to access funds or receive payments through traditional banking channels.
In conclusion, it appears that both the Silvergate Bank controversy as well as increasing regulations imposed by U.S authorities could be contributing factors behind the sudden decline in Bitcoin’s price on March 3rd which led to a loss of nearly $22 billion from its total market capitalization