Bitcoin plummets and loses $20,000 for the first time since mid-January

Bitcoin plummets (-8%) and loses the $20,000 level, something that has not happened since the middle of last January. The wave of negative news is crushing the crypto and ending the strong uptrend since the beginning of this year.

Wednesday night saw the failure of Silvergate Bank, a relevant cryptocurrency-friendly lender. Also on Wednesday, the US Department of Justice moved 49,000 Bitcoins seized from the Silk Road darknet market to new addresses, suggesting that the government may soon be interested in selling this stash.

"Silvergate is one of many factors that are testing Bitcoin's weakness," Joe DiPasquale, CEO of cryptocurrency fund manager BitBull Capital, wrote in an email, as 'Coindesk' reports. "In addition to Silvergate, there is market concern of further interest rate hikes by the FOMC (...). The SEC is also showing increasing scrutiny of cryptocurrencies. Overall, the market has continued to tighten and retest support levels," he added.

SVB'S ANNOUNCEMENT UNDERPINS THE CUTS

The announcement of Silicon Valley Bank's (SVB) capital increase and the collapse of the bank, which has spread to financial stocks and is sending world stock markets plummeting, is also penalizing Bitcoin on Friday.

Santa Clara, California-based SVB made a surprise announcement on Thursday of a $1.75 billion capital increase after posting significant losses in its portfolio, which includes U.S. Treasuries and mortgage-backed securities. In a prospectus for investors, the bank explained that it needs the proceeds to plug a $1.8 billion hole caused by the sale of a $21 billion loss-making bond portfolio, comprised mainly of U.S. Treasury securities.

In the rest of the altcoins market, there have been sharp falls. Ripple (XRP) and Binance coin (BNB) dropped nearly 6%. For its part, Cardano (ADA) fell by almost 3%, while Dogecoin (DOGE) and Solana (SOL) plummeted by 8%.

Translator: Alejandra Zamora