• Silvergate Bank recently shut down, leading to a dip in the value of bitcoin.
• The US Federal Reserve’s interest rate comments have also caused further bearish sentiment and market uncertainty.
• Analysts believe that this negative sentiment may continue for the rest of the year.
Silvergate Bank Shutdown Causes Bitcoin Dip
In mid-March, news of Silvergate Bank’s closure sent shockwaves throughout the crypto space, causing bitcoin to briefly fall below $20K and overall digital currency assets to dip below the $1 trillion mark. This event has been called one of the biggest monetary collapses since the Great Recession and is certainly a major blow to traders who were hoping for a rally earlier this year when BTC hit a six-month high of about $25K per unit.
US Federal Reserve Adds To Uncertainty
The situation was further complicated by US Federal Reserve Chairman Jerome Powell’s recent statement that interest rates are likely to move higher than expected in 2023. This unexpected shift has added more bearish sentiment and market uncertainty into the mix, making it difficult for traders to remain optimistic about their investments in digital currencies.
Analysts Weigh In On Market Conditions
Yuya Hasegawa – an analyst at Bit Bank – noted that there is little reason to buy bitcoin now as there are currently too many negative developments going on both within and beyond just the crypto industry. Vijay Ayyar – vice president of corporate development at Luno – echoed similar sentiments by pointing out how overall sentiment has shifted towards bearishness due to a combination of macroeconomic and interest rate changes.
Will This Year Repeat 2022?
With these latest developments, many wonder if 2023 will be just as dismal as 2022 was for digital currencies or if investors can expect some improvement over time. It remains unclear whether or not we will see an upturn in prices any time soon, but it is important for traders to stay informed on all current events so they can make informed decisions when it comes time to invest their money.
Though Silvergate Bank’s collapse certainly set off alarm bells across the crypto space earlier this year, ongoing news from sources like the US Federal Reserve has kept investors on their toes ever since then with no clear answer in sight yet regarding where prices may end up by year’s end. Nevertheless, keeping tabs on current events is essential if you want your investments in digital currencies to be successful ones.