Bitcoin and the broader crypto market ended the week lower for the second consecutive week and the total crypto market cap hit a low not seen since November. The major catalyst for lower prices was the fallout and implosion of crypto-friendly bank, Silvergate Bank.
As at 12 March 2023, bitcoin was trading at US$20,549. Ethereum outperformed bitcoin over the week, down 6.21% vs bitcoin’s 8.39% loss. Bitcoin’s market capitalisation fell to US$397 billion, with the total crypto market back below US$1 trillion at $950 billion. Bitcoin’s market dominance was at 41.8%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $20,549 | $22,584 | $19,628 | -8.39% |
| ETH (in US$) | $1,473 | $1,579 | $1,378 | -6.21% |
Source: CoinMarketCap. As at 12 March 2023. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.
Source: Glassnode. Past performance is not indicative of future performance.
Crypto news we’re watching
Stablecoins depegged
The second largest stablecoin, USDC, depegged and reached a low of US$0.869 per coin before recovering to $0.97 after the issuer, Circle Internet Financial, announced through a blog post that it “will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.” The stablecoin started to lose its peg due to the Silicon Valley Bank (SVB) bank collapse. $3.3 billion of USDC’s cash was being held with SVB when the FDIC seized the bank’s assets on Friday.1
Following the depegging, a number of major crypto exchanges suspended trading in, and conversions of, USDC as a precautionary risk measure. Five other stablecoins, including GUSD, DAI, FRAX, USDP and USDD, also dropped below parity around the same time. The largest stablecoin by market cap, Tether (USDT), has managed to remain between $0.99-$1 since the SVB turmoil began.2
Potential timeline for crypto regulation in Australia3
The Australian government seems to be in no rush to implement new cryptocurrency rules and, according to some industry observers, could possibly take until 2024 or 2025 due to investor outflows from the sector over the past year. It was previously expected that new rules would be introduced this year. Instead, the government is aiming to release consultation papers and hold stakeholder roundtables in Q2 or Q3 of this year.
In a recently released report, the Australian Treasury indicated that it “considers these concerns are somewhat mitigated by the current market conditions resulting in less consumer demand for crypto assets; and the need to complete the token mapping exercise to provide clarity on how any new licensing framework would operate in practice.”4
CRYP company spotlight
“Crypto bank” announces intent to wind down
Silvergate Bank, known as the bank for crypto companies, announced two weeks ago that it was delaying the filing of its annual report due to questions from its auditors, as well as operational issues. This was amid investigations from bank regulators and the US Department of Justice. Some of the bank’s clients included Coinbase Global, Galaxy Digital, Paxos, Circle, Cboe’s digital asset exchange, Bitstamp, and Gemini, who all suspended their partnership with Silvergate Bank the day after the announcement.
Just a couple days later, the bank discontinued its Silvergate Exchange Network (SEN). The network provided a 24/7 settlement service (crypto payments network) that the bank’s clients could use to conduct transactions with each other.5
However, last week, Silvergate Capital Corporation announced its intention to wind down operations and voluntarily liquidate Silvergate Bank. The bank plans to fully repay all deposits as part of its wind down and liquidation.6
On-chain metrics
Bitcoin (BTC): Realised Price
Realised Price is a proxy for the average price the market paid for each bitcoin, calculated as the realised cap divided by the current supply.
According to data from Glassnode, as at 11 March, the bitcoin price of US$20,663 hovered just above the realised price of $19,714.
Source: Glassnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Percent Supply in Profit
This metric shows the percentage of circulating supply in profit, i.e. the percentage of existing coins whose price at the time they last moved was lower than the current price.
Based on data from Glassnode, as at 11 March, the supply in profit fell to just above 61% on the recent pullback of price, from a high of over 73% on 15 February.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
While most cryptocurrencies are down double digits, Ripple (XRP), the fourth largest crypto excluding stablecoins, was a top performer amongst the Top 50, down only 1.8% as of 12 March. Helping keep the price higher were investor expectations that its court case against the Securities Exchange Commission is nearing an end and it will come out a winner. The SEC alleges that executives illegally sold XRP to investors without first registering it as a security.7
Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment.
Any investment in crypto assets or crypto- focused companies should only be considered as a very small component of an investor’s overall portfolio.
1. https://www.coindesk.com/markets/2023/03/11/usdc-stablecoin-and-crypto-market-go-haywire-after-silicon-valley-bank-collapses/
2. https://news.bitcoin.com/usdc-stablecoin-depegging-causes-concern-among-crypto-advocates-5-other-stablecoins-slip-below-parity/
3. https://www.afr.com/technology/despite-frauds-and-flameouts-government-slow-walks-crypto-laws-20230303-p5cpbl
4.https://treasury.gov.au/sites/default/files/2023-02/foi-3215.pdf
5. https://news.bitcoin.com/silvergate-bank-terminates-crypto-payments-network-as-shares-plunge-to-record-low/6. https://www.coindesk.com/policy/2023/03/08/crypto-bank-silvergate-announces-voluntary-liquidation/7.https://www.bloomberg.com/news/articles/2023-03-09/crypto-exchange-kucoin-sued-in-new-york-s-crackdown-on-industry?sref=6EQWk76O
Past performance is not indicative of future performance.
Off the Chain is published every Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.
It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.
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Written by
Justin Arzadon
Director, Adviser Services & Head of Digital Assets.
C4 Certified Bitcoin Professional (CBP) and Blockchain Council Certified Bitcoin Expert™ with over 18 years’ experience in the ETF market. Passionate about the future of money.
Read more from Justin.