Drop in Bitcoin, Ethereum, Solana, And Shiba Inu: A Major Reasons For Crypto Fear

While cryptocurrencies are not immune to unexpected market swings and volatility, the most recent market upheaval has left many in the sector reeling.

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On Friday, a big red bar flashed on the trading screens of key cryptocurrencies, causing their prices to collapse by hundreds of millions of dollars in hours.

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Bitcoin's BTC/USD+0.46%+ Free Alerts price fell by 4.8% in the last week, while Ethereum's ETH/USD+0.13%+ Free Alerts price fell by 3.9%. Altcoins also performed poorly in the last week, with Cardano ADA/USD-0.22%+ Free Alerts and Solana SOL/USD+1.19%+ Free Alerts falling by 6.3% and 8.3%, respectively. Shiba Inu SHIB/USD-0.73%+ Free Alerts and Dogecoin DOGE/USD-0.77%+ Free Alerts, two popular meme coins, both lost 9.9% and 5.5%, respectively.

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The following are the primary causes of the recent market downturn:

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Dispute Over Silvergate Bank: One of the primary causes for the abrupt decline in cryptocurrency prices was confusion around Silvergate Bank SI+0.70%+ Free Alerts, a California-based crypto-bank that plays a critical role in supplying market liquidity.

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Silvergate Bank shares plunged 58% during trading in the United States on Thursday and continued to fall on Friday.

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The bank lets cryptocurrency exchanges and other users swap bitcoin for fiat money, and its decline has raised concerns about the cryptocurrency market's stability.

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Coinbase Drops Silvergate: Another reason contributing to the market collapse was Coinbase's decision to drop Silvergate. COIN+1.27%+ Free Alerts has decided to halt payments to Silvergate.

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Coinbase, one of the world's major cryptocurrency exchanges, claimed "technical problems" as the cause for the suspension.

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Yet, the move has heightened worries about the safety and security of bitcoin exchanges.

Gemini, Crypto.com, Bitstamp, and MicroStrategy are a few examples.

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MSTR-2.36%+ Free Alerts: Many cryptocurrency firms reported temporary halts on taking deposits made through Silvergate Bank on March 2.

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This heightened concerns about the bank's viability and the security of bitcoin exchanges.

During a recent Investor Advisory Committee meeting, SEC Chair Gary Gensler voiced concern about the concept of crypto exchanges operating as qualified custodians for investment advisors.

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He acknowledged that a new regulation requiring advisers to utilize certified custodians for asset safekeeping, including cryptocurrency, would strengthen current safeguards.

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This has sparked new concerns about the regulation and monitoring of cryptocurrency exchanges, contributing to the market's volatility.

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Wallets Associated With FTX.com And FTX.US Exchanges Face A Substantial $2.2 Billion Asset Shortfall: FTX Trading Ltd.

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FTT/USD+0.21%+ Free Alerts and its related creditors have claimed severe shortages totaling $2.2 billion in fiat bank accounts and digital asset wallets associated with the FTX.com and FTX.US exchanges.

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The corporation presented to the Official Committee of Unsecured Creditors and indicated that it will be put on the docket in the Chapter 11 proceedings.

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