TEMPO.CO, Jakarta - The so-called crypto winter looms over the cryptocurrency world, expected to bring damage to the industry's development. The latest cryptocurrencies to be affected by the situation are Coinbase (COIN) and Silvergate Capital Corporation (SI).
The crypto winter stomped Coinbase (COIN) and Silvergate Capital Corporation (SI) stocks at around the same time. At the start of this year, Market Insider reported Coinbase and Silvergate's stock prices plummeted by some 13 percent and 48 percent respectively.
San Diego-based Silverbase has seen up to US$8.1 billion of deposits withdrawn as of Q4/2022, forcing the company to sell billions of dollars worth of bonds with a loss of more than US$700 million. Silverbase also resorted to downsizing, letting go 40 percent of its workforce or 200 employees.
What happened was likely an impact of the FTX incident. Silvergate CEO Alan Lane, who attended the Oppenheimer Blockchain & Digital Assets Summit, sought to convince investors that their capital-to-liquidity ratio would be able to withstand the volatility. This message did little to stem its stock from crashing, with COIN's share price slipping by almost 10 percent in November 2022.
Meanwhile, Coinbase stock plunged by more than 91 percent from its IPO price in April 2021. Luckily, even with the ongoing steep downtrend, there is hope for a bullish divergence in the company's weekly RSI indicator as of May 2022.
Financial analyst and DBX Digital Ecosystem CEO, Igor Zakharov, said the crypto winter started in early 2022. It refers to a difficult time faced by the crypto market, which can be defined as a prolonged period of slump in crypto prices.
What happened to Coinbase and Silvergate can confirm that even leaders of the global crypto space are not impervious to the turmoil of the 2023 economic recession. The crypto bubble's burst has so far deflated more than US$2.2 trillion of the digital asset's market value.
MELYNDA DWI PUSPITA
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