Why Is Crypto Down Today? Due to the impending liquidation of Silvergate Capital, the price of the top cryptocurrencies is falling today. Let's see why it collapsed.
Why Did SVP Collapse?
Due to the increase in US interest rates, Silvergate declared on Wednesday that the company will write off its assets and close its doors. The bank is still suffering as a result of FTX, a major client, going under in November 2022.
With the collapse of FTX in November 2022, customers have taken more than $8 billion out of Silvergate's coffers. At the end of the previous year, the bank actually only had $4.6 billion in cash on hand.
The bank's Silvergate Exchange Network, a significant crypto payment hub, was shut down as a result of recent efforts by other significant cryptocurrency companies like Coinbase, Galaxy Digital, and Circle to distance themselves from Silvergate.
Shares of Silveragate had fallen nearly 90% year to date before the bank shut its doors.
Should You Buy the Dip in Crypto?
Crypto investors should take caution while buying the dip.
When asset values fall as quickly as they have in the cryptocurrency market recently, it can seem like a good time to buy that coin you've been eyeing. But old Wall Street professionals have a rule of thumb that aptly describes moments like this:“ Never try to catch a falling knife.”
You should be able to imagine that "buying the dip," or catching a falling knife, almost always results in pain. That is not to say that experienced investors cannot profit quickly by trading during periods of increased market volatility. Yet, the key takeaway is that sudden, significant market movements can be uncomfortable for the average retail investor.
Why Is Crypto Down Today? Why Did SVP Collapse? - Hopefully, this article can help you know why crypto is down today.
