Chain Reactions: Why did Bitcoin and crypto just tank? Silvergate? Ethereum’s delay on Shanghai upgrade?
Welcome to March madness in the Cryptoverse. Bitcoin, Ethereum and the rest of the crypto market just dipped hard, after earlier appearing to have shrugged off negative news surrounding the potential crumbling of crypto-connected bank Silvergate.
After writing the headline: Crypto-friendly bank Silvergate looks shaky as Coinbase and others turn backs; Bitcoin doesn’t care…
… we did briefly ponder whether the global crypto-trading market had been slightly slow to react to that particular crypto-contagion fear.
Maybe that’s it, or more likely there’s much more to it than that. Either way, Bitcoin does care about somethings or others today.
There’s some other not-so-great news bites floating around, too, including this regarding major banks HSBC and Nationwide imposing credit-card-buying restrictions on crypto assets in the UK:
Nationwide and HSBC toughened limits on retail customers’ access to crypto in the last week, becoming the latest UK banks to impose curbs after industry scandals and regulatory warnings https://t.co/YvBLFadIOi
— Bloomberg Crypto (@crypto) March 2, 2023
And this, the latest from US SEC boss Gary Gensler, who has this week broadly questioned the status of some crypto exchanges as “qualified custodians”:
NEW⚠️ Cryptocurrency exchanges cannot be relied on as qualified custodians – SEC Chair
We need transparent audits now‼️ pic.twitter.com/BLqWc96yXq
— Bitcoin Archive (@BTC_Archive) March 2, 2023
“Just because a crypto trading platform claims to be a qualified custodian doesn’t mean that it is,” the SEC chair said at an Investor Advisory Committee meeting on Thursday.
According to breaking reports, about US$185 million was liquidated from the crypto market in a mere 45 minutes of carnage.
is this the part where we buy? https://t.co/OgE1r10PV5
— Chris Blec (@ChrisBlec) March 3, 2023
US equities closed very strong, Asian stocks gapping higher on the open…
Yet, in the last hour there's been almost 200MM in crypto long liquidations. pic.twitter.com/xQHLqbRE0L
— tedtalksmacro (@tedtalksmacro) March 3, 2023
Hour of power 🩸📉 pic.twitter.com/lxPxhef239
— Matt Willemsen (@matt_willemsen) March 3, 2023
At least one prominent trader seems to have made a pretty good call on it…
— EddyisKongz (@eddyiskongz) March 3, 2023
At the time of writing, BTC has dipped from US$23.5k, where it was earlier this morning when we posted, to about US$22,300, where it’s languishing now and attempting to break its fall on a branch or two, a la John Rambo in First Blood.
Not sure if this is of major concern, or even major surprise, but Ethereum developers have decided to push back the highly anticipated “Shanghai” network hard-fork upgrade that will allow those who’ve been staking their Ethereum on the mainnet to withdraw their ETH from that for the first time.
Core Ethereum developers have now confirmed that the upgrade will now likely take place in the first two weeks of April instead of this month.
As reported by Decrypt, “the exact timing of Shanghai’s implementation has been particularly closely watched due to the upgrade’s seismic financial implications.”
There is a good deal of uncertainty about how the upgrade will affect the price of ETH and if it will add immediate selling pressure. This uncertainty has potentially contributed to keeping ETH somewhat suppressed in general just lately.
What is the #Ethereum Shanghai Upgrade?
Here's a quick explanation on what it means for your staked #ETH and how the Liquid Staking Derivatives (LSD) narrative came about!
— CoinGecko (@coingecko) February 28, 2023