Crypto prices fell Thursday after Silvergate, a bank that has been at the center of the industry’s growth, made a decision to shut down.
Bitcoin slid 7% to $20,474.50, according to Coin Metrics. Ether lost about the same amount and was last trading at $1,440.45.
The slight move lower began late Wednesday, a few hours after Silvergate Capital announced it will wind down operations and liquidate its crypto-friendly bank.
The relatively small size of the move indicates that cryptocurrency investors priced the news in last week when the company first warned it may not be able to continue operating and it shut down the SEN, or Silvergate Exchange Network, according to Conor Ryder, research analyst at Kaiko.
The declines deepened by Thursday afternoon, however, after shares of SVB Financial, whose Silicon Valley Bank, which largely banks tech startups, announced a plan to raise more than $2 billion in capital to help offset losses on bond sales. Although SVB has said it has minimal exposure to crypto, its need to recapitalize on the heels of the Silvergate event has linked the two events in some people’s minds.