Elon Musk, a well-known proponent of cryptocurrencies, especially the joke coin DOGE, has taken to Twitter to taunt those who frequently label cryptocurrencies as a fraud and advise taxpayers to keep their money in banks. These individuals frequently host well-known podcasts, are well-known in the financial community, and make appearances as guests on CNBC programming.
The problem is that two sizable banks that support cryptocurrency have run into serious difficulties. One is shutting down at a loss, and the other, Silvergate Bank and Silicon Valley Bank, is in talks to buy itself out.
Following Elon Musk's tweet, Dogecoin showed a negligible increase of less than 0.5%.
Elon Musk Mocks Those Who Despise Cryptocurrencies as Two Banks Fail
Musk posted a meme showing a person struggling to decide between hitting one or two buttons while perspiring in a moment of uncertainty. Keep your money in banks, the caption beneath one option advises, while the caption under the second instructs you to keep your money in cryptocurrency.
— Elon Musk (@elonmusk) March 11, 2023
Silvergate bank, which has since 2013 provided services to cryptocurrency companies and exchanges, including the insolvent FTX exchange, has announced that it is ceasing operations as a result of recent developments in the crypto market and regulatory proceedings. The bank was managed by Silvergate Capital, which declared that it is shutting down its banking section after losing money when it sold its assets. This was required to make up for the $8 billion that clients unexpectedly withdrew when the value of cryptocurrencies started to decline.
The Silicon Valley Bank is the second significant crypto-friendly bank that is apparently about to close. According to U.Today, SVB Financial, the bank's parent business, is currently in talks to sell the institution because consumers have started actively withdrawing their money and the value of the bank's stock is falling.
Despite A Potential SVB Sale, Bitcoin Increases
The leading cryptocurrency Bitcoin had an approximately 6% decline last Friday, March 3, losing the $24,000 mark and falling to the $22,000 range in less than an hour. The cryptocurrency market's response to the news of Silvergate's closure as a crypto-friendly bank led to the price decline.
The Silvergate scandal and other unfavorable events at the beginning of the week caused Bitcoin to fall below the $20,000 mark, which it had last reached in January.
At this point, Bitcoin is showing signs of recovery and is currently trading at $20,616, up 3.5% over the previous day. It doesn't appear to be impacted by reports that a significant bank that supports cryptocurrencies is having trouble with its stock price and is considering selling.
The substantial increase in the Non-Farm Payroll index that increased 311,000 in February—far above what analysts had predicted—has resulted in a favorable response in the cryptocurrency market.
