Decline in Cryptocurrency Market following Closure of Silvergate's SEN

Bitcoin and other cryptocurrencies experienced a decline following the announcement of Silvergate Capital Corp.'s decision to shut down its cryptocurrency payments network, the Silvergate Exchange Network (SEN). The bank made a "risk-based decision" to close the network just two days after expressing doubts about its viability. The SEN allowed for 24/7 transfers between investors and cryptocurrency exchanges, unlike traditional bank transfers which can take days to clear. The bank's shares fell by more than 2% in after-hours trading on Friday, and had already fallen to a record low on Thursday, ending the day down more than 97% from their all-time high in November 2021. Silvergate had warned earlier in the week that it was assessing its ability to continue as a going concern, revealing that it had sold additional debt at a loss and that further losses could lead to the bank being "less than well-capitalized." After this warning, several prominent cryptocurrency firms, including Coinbase Global Inc and Galaxy Digital, ended their banking partnership with Silvergate, and other firms, such as Paxos and Circle, have suspended their partnerships with the bank.