Bitcoin and Ether prices slumped in Friday morning trading in Asia, along with all other top 10 non-stablecoin cryptocurrencies amid reports U.S.-based cryptocurrency bank Silvergate Capital Corp. could be the next corporate victim of the FTX crash. Polkadot led the losses. U.S. equities rose Thursday after a week of fluctuations on conflicting Federal Reserve comments about interest rates and data suggesting inflation is well entrenched in the economy.
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Fast facts
- Bitcoin fell 3.22% in the past 24 hours to US$22,827 as of 09:30 a.m. in Hong Kong, according to CoinMarketCap data, extending its weekly loss to 4.78%. Ether dropped 3.19% to US$1,602, for a seven-day fall of 3.33%.
- Both tokens fell as much as 5% later in the Asia morning. Despite the slump, both are still up around 40% for the year to date.
- Polkadot led the losers among the top cryptocurrencies, sliding 6.00% to US$6.08, and losing 14.63% in the past seven days. The token has been in a downward trend for two weeks, though the Polkadot community remains active, leading the daily development on Github, according to Github tracker ProofofGithub on Thursday.
- Silvergate said Thursday in a filing to the U.S. Securities and Exchange Commission (SEC) that the company is evaluating “its ability to continue as a going concern,” which sparked a more than 50% plunge in its stock price. A raft of crypto exchanges and platforms have cut ties with the bank.
- As a Federal Reserve member bank, Silvergate positioned itself as a gate between traditional finance and crypto. The bank was hit hard by the FTX collapse and reported a US$1 billion loss for the fourth quarter of 2022. It laid off 40% of its staff in January.
- The total crypto market capitalization dropped 1.02% in the past 24 hours to US$1.07 trillion. And the total trading volume over the last 24 hours went down 12.30% to US$42.65 billion.
- U.S. equities closed higher on Thursday. The Dow Jones Industrial Average rose 1.05%, the S&P 500 moved up 0.76% and the Nasdaq Composite Index edged higher to 0.73%.
- Atlanta Fed President Raphael Bostic indicated on Thursday that he supports an interest rate increase of 25 basis points in March, alleviating some recent concern the Fed may hike 50 points. This helped stocks move higher, but the market is caught in cross-currents as Fed Governor Christopher Waller said the same day that recent data suggests the inflation fight is far from over.
- Data from the U.S. Department of Labour on Thursday showed initial jobless claims fell in the week ending Feb. 25, while labor costs rose, indicating inflation hasn’t been tamed by the Fed’s interest rate hikes so far.
- The Fed set U.S. interest rates between 4.5% to 4.75% in February, the highest since October 2007. Analysts at the CME Group expect a 72.3% chance that the Fed will raise rates by another 25 basis points this month. They also predict a 27.7% chance for a raise of 50 basis points, a decrease from 29.9% on Thursday.
- Data from the U.S. services industry is expected on Friday and several other Fed officials will be speaking the same day, which may further add to the mixed messages to markets. Separately, China will kick of its so-called “Two Sessions” this weekend, the most important political meetings of the year for setting economic policy in the world’s second-largest economy.
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