- An intense rise in the price and sudden drop is not new to the crypto environment.
- The latest BTC and USDC drops were due to crypto-friendly banks.
Past weekend has given a panic attack to every other person in the financial sector, whether the conventional banking arena or the crypto market. The current week has started quite positively now. Bitcoin (BTC) moved up from $19.6K to $24.8K.
The intense rise in the price and sudden drop is not new to the crypto environment. The hype of the investors and FOMO in buying trends even puts it under the umbrella of a bubble. But the last week’s happenings are very far from it. The interrelation of CeFi and DeFi is evident and is also very staggering.
Instances to Remember
The fear was set forth by an announcement of Silvergate bank’s discontinuation of Silvergate Exchange Network (SEN). Following it was the winding down of operations and voluntary liquidation by the same crypto-friendly entity. Post this happened the price fall in the market pioneer, BTC.
Then came the collapse of Silicon Valley Bank, pulling down the USDC pegging. The stablecoin depegged up to $0.8774, hitting its All Time Low (ATL). As the Signature Bank failure hit the news, the whole crypto market measure to overcome the prior crypto winter was placed under a question mark.
Failure of Terra and its algorithmic stablecoin, and the bankruptcy of FTX were all effects of the internal events of the crypto firms. But the latest BTC and USDC drops were due to crypto-friendly banks.
Though the situation got better with the help of peer crypto firms and other renowned banks. The correlation of the crypto industry with traditional finance is shocking. The decentralization and trustless economy attributes of blockchain technology are devastated.
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