On March 9th, Bitcoin rates experienced a sharp decline, dropping below $20,000 for the first time in two months.
According to experts, the reason behind this drop can be attributed to the liquidation of Silvergate Cryptobank and the unveiling of the US budget for 2023.
President Joe Biden announced the budget, which sparked a sell-off on the US stock market, leading to Bitcoin’s sudden drop.
Moreover, the new budget proposes a 30% tax on electricity consumption by miners, with the aim of curtailing mining activity.
Interestingly, the US holds the top spot in the world in terms of the Bitcoin network’s hash rate. As a volatile asset, Bitcoin’s reaction to such developments is typical.
The announcement of the closure of Silvergate cryptocurrency bank, which provided services to many crypto firms, only added to the ongoing turmoil in the market.
The bank has promised to refund all customer deposits before ceasing its operations. As of writing, the value of the first cryptocurrency stands at $19,960, marking an 8.15% drop in the past 24 hours.
Ethereum exchange rates also fell by 7.9%, with the coin now trading at $1,420. While some popular altcoins lost up to 5% of their capitalization, other tokens and cryptocurrencies recorded more significant drops.
For instance, the Huobi exchange token saw a massive 20% drop, while Tron cryptocurrency fell by 12.5%. It is worth mentioning that amid the market crisis, BTC transfers declined by 35% per day.
Additionally, the number of transactions decreased by 17%, and the rate of active addresses dropped by 10%.