Earlier today, we reported that Silvergate Bank – a tech-friendly financial institution stationed in Silicon Valley – had collapsed. The company is liquidating all its assets after being shuttered by the federal government due to a high number of monetary failures, and bitcoin suffered because of this.
Silvergate Has Closed, but There’s Still Hope for Bitcoin
Many are saying this is the start of the 2008 Great Recession all over again. Many think this is a continuation of 2022, and that bitcoin and all its crypto cousins will never recover from bearish conditions, but these thoughts could be jumping the gun, and this piece is a reminder that crypto fans need to remain calm over the coming months if the space is to recuperate and accomplish all it’s meant to do before the year is out.
First off, crypto fans may have entered a stage of wishful thinking when they thought with bitcoin’s six-month high of $25K (accomplished in mid-February) the bear market was fully and officially over. Let’s not forget just how devastating 2022 really was. The crypto space lost more than $2 trillion in valuation. Bitcoin lost more than 70 percent of its value, and many mainstream assets willfully chose to follow in its footsteps.
The fact is that you don’t just recover from something like that over the course of a few months. 2022 will arguably go down as one of the worst – if not the worst – year for crypto on record, and it’s going to take a while for all the wounds to scab up and heal.
What’s happening with Silvergate is a reminder of this. There were bound to be a few repercussions that led into the new year from 2022, and thus we cannot expect everything to fully recuperate and be hunky-dory within the span of 90-120 days. The level of damage we’ve witnessed simply cannot alter course that quickly, but while Silvergate is indeed crashing and burning as we speak, the space is still showing signs of trying to pull itself out of the doldrums. The fact that bitcoin dipped following news of the collapse only to pull itself back up over the $20K line a few hours later is proof of that.
2023 Will Likely Be Another 2019
If we all remember, 2019 took on similar form to how 2023 appears following the bear run of 2018. Four years ago, the crypto space entered the early stages of healing, though a complete turnaround arguably wasn’t witnessed until the following year. The end of 2019 saw bitcoin rise into the $19K level, just a few thousand dollars above where it ended 2018. 2023 will likely be the same scenario, meaning we can expect bitcoin to probably be close to around $30K towards the end of the year.
Any further healing, crypto fans should not be discouraged if they don’t see that until 2024.
