The price of Bitcoin (BTC) has fallen below $20,000 U.S. for the first time in two months as fears of higher interest rates and the collapse of crypto bank Silvergate Capital (SI) spook investors.
In all, the cryptocurrency market saw more than $70 billion U.S. wiped from its value over the past 24 hours as selling in digital coins and tokens accelerated.
Bitcoin, the largest cryptocurrency by market capitalization, is now trading around $19,600 U.S., according to data from CoinDesk. Ethereum (ETH), the second largest crypto, is down about 10% and trading at $1,380 U.S.
The crypto selloff has been prompted by several factors, including increased expectations that the U.S. Federal Reserve will keep interest rates higher for longer than anticipated as it tries to lower inflation in America.
Another issue weighing on the crypto sector is the collapse earlier this week of Silvergate Capital, a major lender within the cryptocurrency space. Silvergate said on March 8 that it is ceasing operations and liquidating its banking assets.
Separately, Silicon Valley Bank (SIVB) said that it sold $21 billion U.S. worth of its holdings at a $1.8 billion U.S. loss.
That bank is a major lender in the U.S. technology start-up space, funding many tech projects in their infancy and viewed as a major part of the venture capital ecosystem.
Both Silvergate Capital and Silicon Valley Bank have seen their stock prices plunge more than 50% this past week.
Bitcoin’s price remains up 18% so far in 2023, though it was up about 40% on the year two weeks ago.
