Bitcoin Price Slips Under $20K as Silvergate Collapses10. March 2023
Bitcoin Price Drops Below $20K
• Bitcoin (BTC) briefly slipped below $20,000 on March 10 for the first time in nearly two months.
• The price dip was likely caused by Joe Biden’s budget proposal and the collapse of Silvergate Bank that services crypto firms.
• At the time of writing, the BTC price had recovered to just above $20K.
Biden Budget Proposal
United States President Joe Biden’s supplementary budget explainer paper revealed on March 9 that US crypto miners could eventually be subject to a 30% tax on electricity costs under a Biden budget proposal that aims to “reduce mining activity.” This proposed increase in taxes is likely one factor contributing to the recent drop in BTC prices.
Collapse of Silvergate Bank
Another factor causing the dip in BTC prices is likely due to the collapse of “crypto-bank” Silvergate Bank. On March 8, it was announced that Silvergate had entered into voluntary liquidation, creating uncertainty for many crypto firms and investors which has had a negative impact on Bitcoin prices.
Recent Price Trend
Bitcoin had a stellar start to 2023 but fell as much as 5% in an hour on March 3 amid uncertainty at Silvergate. The price doesn’t appear to have been able to lift since then, falling even further upon news of Biden’s proposed budget changes.
Overall, it appears that news from both President Biden’s proposed budget and Silvergate Bank’s collapse have contributed to Bitcoin prices dropping below $20K for the first time since January 2021. However, at time of writing, BTC was hovering just above this level again.