The week ends with a stiff blow to the crypto industry after a stable seven days in the market overall. Major digital assets experienced a decline in value, with Bitcoin and Ether dropping over 4% within the last 24 hours. This came as customers fled crypto-friendly bank Silvergate, whose stock fell by 58% during US trading on Thursday.
The release of some of Mt. Gox's bitcoin, which would increase circulating supply, was also cited as a source of Bitcoin's volatility. Bitcoin's market cap declined by over $20 billion to $431.9 billion. The overall market cap of crypto is currently at $1.08 trillion. Here are all the day's biggest news stories.
1 - Silvergate Bank, a popular crypto bank for industry clients, has experienced a mass exodus of customers following a worrying announcement. The bank satiated it would need to review its books with auditors and warned of potential legal inquiries, a common issue for crypto firms in the US recently.
The bank's share price plummeted by more than 50% to reach an all-time low after Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy Digital, and Gemini said they would suspend business with the bank. Kraken is the only major crypto exchange that appears to be continuing to use Silvergate.
2 - Bitcoin's long liquidations hit the highest level since August as exchanges liquidated bullish long futures worth over $62 million. Put plainly, a long future means the holder will profit if the price of the asset goes up.
The dominance of long liquidations shows the market sentiment was bullish, meaning most traders were positioned for a price rally. However, Bitcoin fell over 5% to $22,000, reaching the lowest since Feb. 14, creating fear among investors.
3 - The market capitalization of Binance USD (BUSD) has fallen below $10 billion for the first time in two years due to regulatory concerns and its delisting from Coinbase. Its market cap has dropped by nearly $14 billion from its all-time high of $23.49 billion in November 2022.
Binance CEO Changpeng Zhao has recently stated that he never had high hopes for the Binance stablecoin project. In response to the fall in demand for BUSD, Binance has minted nearly $50 million worth of TrueUSD (TUSD), causing it to break into the top five stablecoins on the market.
4 - The highly-anticipated Shanghai upgrade for Ethereum was delayed by approximately two weeks and is now expected to be rolled out in early April. The delay was announced at an Ethereum developer meeting on March 2, where core developers agreed that the hard fork would occur about two weeks after the Goerli testnet launch on March 14.
The Goerli testnet will be the final dress rehearsal for the Shanghai hard fork before it is deployed on the mainnet. The Shanghai upgrade will allow for the phased withdrawal of Ethereum staked on the Beacon Chain. Liquid staking providers may see an influx of collateral in the months following the upgrade.
5- Russia's first mutual investment fund focused on financing cryptocurrency mining operations is being established. The fund, established by Finam Management, will only be accessible to qualified investors with a minimum threshold of 300,000 rubles.
Finam Management aims to raise 500 million rubles before incorporating the leasing firm. Part of the funds will be used to buy mining machines and the rest for electricity and maintaining the fund.
The growing attention to crypto mining has been attributed to the potentially high profitability of mining investments and Russia's advantages as a mining destination, such as low-cost energy and a cool climate. A bill regulating the industry is under review in the lower house of the Russian parliament.
6 - US lawmakers Cynthia Lummis and Patrick McHenry have criticized the crypto accounting guidelines outlined by the SEC in April 2022. They argue that they put crypto customers at greater risk of loss.
The guidelines require financial companies holding crypto for customers to recognize all digital assets they do not control as a liability. They also state that digital assets should be backed by a safeguarding asset. In a letter to ranking officials, the lawmakers argued that the guidelines will discourage regulated entities from engaging in digital asset custody, which is counterproductive to the regulator's goal.