Sun, September 25, 2022

Crypto-friendly bank and digital currencies

Silvergate and cryptocurrencies

The cryptocurrency market is evolving for the last ten years. As a result, banks, as well as other institutions, have to embrace this emerging market. Digital currencies such as Bitcoin, Ethereum and others slowly but steadily changed the attitude towards the cryptocurrencies.

One of the banks which is already cooperating with various crypto-related companies is the Silvergate Bank. This bank from the U.S. is, without a doubt a crypto-friendly bank.

Based on the information from the updated IPO prospectus filed in September 2019 bank serves more than 750 crypto-related companies. It is worth mentioning that the number of clients from this industry continues to increase as in March, Silvergate served the only fraction of current clients.

Last week, Silvergate Bank officially began selling shares on the New York Stock Exchange. On November 6, the bank received a “notice of effectiveness” from the U.S. Securities and Exchange Commission.

Digital currencies: Bitcoin’s rally in 2017Bitcoin’s history

It is a well-known fact that Bitcoin reached the best result in December of 2017 when the price was close to surpassing $20,000.

Two researchers analyzed the data. They wanted to understand how the price rose from less than $1,000 to almost 20,000 in under 12 months.

Finance professors John Griffin from the University of Texas and Amin Shams from the Ohio State University tried to find out which factors affected the Bitcoin’s price.

They found that around half of Bitcoin’s value between March 2017 and March 2018 was created by trades between Bitcoin and tether. This tether is so-called stablecoin, which has links with the British Virgin Islands-based Bitfinex bitcoin and cryptocurrency exchange.

Another interesting fact is that both Bitfinex and Tether Ltd, which controls the stablecoin tether, same people own both of them.

Researchers determined that an unidentified Bitfinex account used tether to manipulate the Bitcoin price. The purpose of this manipulation was to create unprecedented demand for the digital token.

John Griffin and Amin Shams are not alone when it comes to this version. Other people also stated that Bitcoin’s price in late 2017 was the result of manipulations.

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