While many companies and internal initiatives imploded over the past year, the industry has seen its own failures, resulting in price collapses, countless bankruptcy filings and, somewhat predictably, many investor losses.
The year started on a positive note, but cryptocurrency has once again taken a big hit. This time, the most obvious reason comes from outside players.
All this affected the performance of most altcoins, leading to another shift in public sentiment.
BTC finally took over 17,000 in the first several weeks of Bitcoin 2023 amid banking woes, pushing the asset above $25,000 in February. After charting a multi-month high, adding nearly 50% over that timeframe, the popular fear and greed index rose to greed from the depths of “fear” and “high fear”.
However, Bitcoin will not be able to double its positive trajectory, although many industry experts have suggested that the bear market is finally over and BTC may once again chart new highs. Instead, the property was stopped before the value dropped to about $22,000.
Further price drops came from possible reasons ranging from the US government’s alleged sale of US government-seized Silkroad Bitcoin to Coinbase (NASDAQ: ) to rising interest rates. Then came some unexpected problems. Silicon Valley Bank – a major commercial bank, or one built to counter bitcoin, collapsed on Friday after failing to raise additional capital.
One might initially think that this actually bodes well for the underlying cryptocurrency, as it shows that even the giants of the traditional financial world can collapse as easily and violently as an ecosystem. After all, BTC was an alternative after the largest US banking collapse in history. SVB became the second loudest explosion of its kind.
However, it turns out that some crypto companies were exposed to a failed bank. One such name is Circle, the industry behind the second largest stablecoin, USDC. As news spread that the company held at least $3.3 billion in SVB, the original stablecoin lost its dollar balance and fell to $0.9 and below.
All this fear again affected the price of Bitcoin, which fell to $19,500 yesterday. This is the lowest level in two months. Naturally, the public sentiment, represented by the symbol of fear and greed, changed again.
The scale, which takes into account various factors such as volatility, social media comments, opinion polls, etc., came down to 33 – the level of fear. Just for reference, it was above 55 in February indicating greed, and 50 last week – neutral.
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