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What Is This Silvergate Mess All About?

As of today the last month of crypto rally just got wiped out last night on what is speculated to be fears from Silvergate. Let's take a look into what's going on and how much it really is going to impact the markets or will it just blow over soon and now is a great time to buy?

*This article is for entertainment purposes only and is not financial advice.

Silvergate bank is one of the key intermediary banks or what I would call middle man banks between the fiat world and crypto world. This is yet another large attempt at governments to take control of things and crush crypto while releasing their own currency called CBDC which I covered yester on this post Paving The Way For CBDCs While the government wont directly come out and tell banks not to support crypto they are issuing firm warnings and reducing other areas of growth for them as a "punishment" I would call it for dealing with crypto assets.

These moves are causing concerns that an already low liquidity issue in the crypto markets might become worse with clamp downs on new money coming into the crypto space. On the flip side of that however Silvergate is nothing like the recent FTX blowup where it's was primarily all liquidity. Silvergate instead is more of a swap hub for fiat to crypto and there's still plenty of alternatives for that at the moment.

I think that's one of the most important things to note here is that Silvergate is not in any way like FTX and there are plenty of alternatives to them. Call it bad business on their part it happens with banks we see many of them shut down and often bailed out.

In general the markets sharp downward trend I have a feeling was primed for the last two months as no real positive news has come out of crypto that would actully cause the markets to rally. Instead it was just waiting for something bad to come out for a reason to dump. It shows it just how touchy the markets are right now in the crypto space and how fears of another FTX crash or a longer bear market are still fresh in the minds of people.

The fallout if something happens to silvergate at least for the crypto market seems rather low and feels like an over reaction at the moment. Silvergate was founded in 1988 a a Californian bank and then mainly focused in on cryptocurrency transactions. With the slow down in transactions, less needs for banks and the fallout of FTX etc Silvergate was remained in question for a while and now everyone is in panic mode to get their money out of that bank. The issue banks are not required to hold all of customers funds and because of that we could be seeing a melt down happen with the bank and people who used it if any crypto/fiat funds are held within it.

Overall though to me it feels bloated and just something small that people are latching on to for a panic sell. The bear market and the last year of slap in the face after slap in the face of stable coins disintegrating into nothing and huge amounts of fraud from FTX and the aftermath of that still continues. If anything this might be a good short term buy spot as I honestly don't see it effecting the overall markets that much.
*This article is for entertainment purposes only and is not financial advice.

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