Crypto Market Losses More Than $70 Billion In 24 Hours As Bitcoin Drops Below $20,000.

Following the bankruptcy of a crypto-focused lender and a sell-off on the American stock market, Bitcoin dropped below $20,000 on Friday, reaching a low that was almost two months ago.

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Throughout the span of the 24 hours up until 5:12 a.m., the value of the cryptocurrency market lost more than $70 billion. ET.

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According to CoinDesk data, Bitcoin was trading down over 8% at $19,900.28 at 5:11 a.m. ET. At $1,400.63, ether was down more than 8%.

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Several reasons have contributed to the sell-off in cryptocurrencies. The movement of cryptocurrency values is fairly strongly associated with that of U.S. stock markets, particularly the Nasdaq, which is heavily weighted toward technology. Major American indices finished down on Thursday.

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Chairman of the U.S. Federal Reserve Jerome Powell said on Tuesday that interest rates could rise and stay higher than anticipated. The last year's increase in interest rates has put pressure on risky investments like equities, particularly cryptocurrencies.

According to Yuya Hasegawa, an analyst at the Japanese crypto firm Bitbank, "there is just little motivation to acquire bitcoin currently as the marketplace is overrun with unfavorable developments, not just especially for the crypto industry but also for the larger financial market as well.

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Banking concerns

The failure of Silvergate Capital, a significant lender to the cryptocurrency sector, is another significant factor affecting cryptocurrency values. On Wednesday, Silvergate announced that it was closing its bank and reducing staff.

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Another illustration of how the demise of important cryptocurrency exchange FTX is still having an effect on the sector is Silvergate's demise. A significant client of Silvergate was FTX.

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Separately, Silicon Valley Bank disclosed late on Wednesday that it had lost $1.8 billion on the sale of $21 billion worth of its securities. A significant bank for technology startups is SVB. It is regarded as the backbone of the private equity sector in the United States because it offers conventional banking services while simultaneously backing digital projects.

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The asset sales occur as SVB struggles to raise money for technological projects because venture capitalists are being cautious due to a difficult macroeconomic climate and rising interest rates.

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Both Silvergate and SVB invested in the United States. Treasurys' value has decreased as a result of rate increases by the Fed. In order to increase their capital, these banks were compelled to sell these notes at a loss.

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"Overall, attitude seems to have turned pretty pessimistic given a mix of global macro and interests rate rises but also the commitment many banks undoubtedly have to long duration securities," Vijay Ayyar, vice president of business communications at crypto exchange Luno, told Trade Algo via email.

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