Crypto prices fell on Thursday after Silvergate announced its decision to wind down operations and voluntarily liquidate.
The slight move lower began late Wednesday, a few hours afterThe relatively small size of the move indicates that cryptocurrency investors priced the news in to last week when the company first warned it may not be able to continue operating and shut down the SEN, or Silvergate Exchange Network, according to Conor Ryder, research analyst at Kaiko.
Thursday's move pushed bitcoin below the key technical level of $22,200. While some investors have welcomed bitcoin's recent sideways movement in light of a series of negative industry developments, chart analysts have been looking a close above $25,000 to give more meaning to its year-to-date gains, now around 30%., which could see a slowdown in inbound flows without the SEN or enough reliable alternatives.
"Those warnings make it difficult for the biggest banks to service the crypto space as we believe they have concluded that the opportunity is not worth the regulatory risk," Jaret Seiberg, an analyst at Cowen, said in a note Thursday. "This likely consolidates crypto exposure to a handful of smaller banks, which means more liquidity risk and more concentration risk. Those are the very risks the banking regulators are trying to combat.
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