This is why the Crypto Market Is Down

by | Mar 14, 2023 | News | 0 comments

In this post, we’ll look at different events that occurred last Thursday that may have crashed investors’ hope of a possible bull run.


  • The crypto market was down last weekend with Bitcoin dropping below $20,000
  • Stock prices nosedived as Thursday’s trading session concluded on a bearish path
  • The KBW Bank Index marked the biggest one-day decline since June 2020
  • Silicon Valley Bank (SVB) is currently in a state of emergency
  • Ethereum (ETH) has been labeled a security amidst KuCoin being accused of illegal operations in the U.S.
  • Huobi Token (HT) experienced a flash crash following whale transactions.
  • About 142k Bitcoin (BTC) is about to be dumped into the market by the Mt.Gox rehabilitation process.

Sit tight and enjoy the full story!

A Dark Thursday/Friday (March 9-10) For Crypto?

Source: CoinMarketCap

As per data on CoinMarketCap, the global crypto market cap went down by 7.63% last weekend.

Also, stock prices nosedived on Thursday. Nasdaq fell by 2.05% while the S&P 500 was down by 1.85%.

Additionally, the KBW Bank Index marked the biggest one-day decline since June 2020, falling by around 8% in just a day.

But the question is WHY? Why did the price of cryptocurrencies and stocks drop in the last 24 hours?

Silvergate And Silicon Valley Bank Crisis

why the crypto market is down

The first reason is the financial troubles of two major banks in the US — Silvergate and SVB.

Silvergate Bank is one of the few banks that acts as an intermediary in the crypto space.

Last week, its parent company – Silvergate Capital Corporation, announced its intent to wind down operations and voluntarily liquidate the banking unit.

Interestingly, Silvergate is another victim of the implosion of FTX, which used the bank to transfer customer funds.

Silvergate suffered a significant decrease in deposits from over $10 billion in 2021 to $6.3 billion by the end of 2022, which has now led to the bank’s closure.

No doubt, this will affect how money moves in and out of the crypto space.

Silicon Valley Bank (SVB), which provides banking services to crypto-friendly venture capitalists, has gone under.

On Thursday, the value of SVB’s securities plummeted by 60% due to poor management.

SVB bought a bunch of mortgage-backed securities (MBS) but when the Fed raised interest rates, the value of those MBS went down.

So, SVB had to sell some of its securities at a loss. Concerned investors pulled out their funds and SVB’s stock value dropped by a lot.

This makes the financial markets more uncertain and impacts cryptocurrency prices.

Just yesterday, HSCB bought Silicon Valley Bank for 1 pound.

$ETH labeled as a security

ETH labeled as a security

Last Thursday, New York Attorney General Letitia James alleged that Ether (ETH) is security via a lawsuit against KuCoin.

The lawsuit claims $ETH is a security under a state court decision, In re Waldstein because it was designed as an investment and continues to function as one.

Also, the lawsuit argues that ETH is a security because users can earn financial rewards by holding the cryptocurrency since Ethereum now operates a proof-of-stake consensus.

This may have contributed to why the crypto market is down.

KuCoin hit with a lawsuit

KuCoin appears to be the latest victim of the recent crackdown by U.S. authorities on the crypto industry.

On Thursday, March 9, the New York Attorney General’s office filed a lawsuit against KuCoin for allegedly “falsely representing itself as an exchange” instead of a “securities and commodities broker-dealer.”

However, KuCoin is being attacked because it is not licensed in the US. And not because it is selling unregistered securities as the lawsuit claims.

Huobi token flash crash

Huobi, another large crypto exchange, saw its native token collapse by 90% in a flash crash during Thursday’s trading between 3:45 pm and 6:10 pm.

As a result, Huobi Token lost over $200,000,000 of its market cap within an hour. Since HT is a major crypto asset, the general market did not miss the impact of this flash crash.

Interestingly, a day before March 9’s large flash crash, Huobi ominously tweeted:

What’s that saying again? To be forewarned is to be forearmed. (LOL)

Whitehouse wants a 30% tax on mining electricity

bitcoin mining tax
why the crypto market is down

Another fascinating news that may have contributed to why the crypto market is down is President Joe Biden’s proposal to subject crypto miners to a 30% tax on electricity costs.

The tax would be implemented after Dec. 31, phased in over three years at a rate of 10% a year, reaching the max 30% tax rate by the third year.

Biden’s proposal is aimed at reducing mining activities in the US and this threatens the existence of mined cryptos.

Mt.Gox 142,000 BTC unlock

why the crypto market is down

Lastly, the plans to refund close to 142,000 BTC to Mt.Gox users may also be contributing to this crypto dip. If this is your first time hearing about this, please watch this video for the full story.

Popular crypto sites have reported that creditors of Mt. Gox, the infamous cryptocurrency exchange that went bankrupt in 2014, will soon be able to recover some of their funds. And this has raised concerns about a large influx of bitcoin into the market. Crypto investors are concerned about a negative impact on bitcoin’s price. 

Hopefully, many early adopters may still hold onto their bitcoin holdings and so, the value of Bitcoin (BTC) may not be affected as much.


Negative events and new regulations are key factors that lead to a downturn in the crypto market. If you notice, 5 out of the 6 events described earlier happened in one day, Thursday 9 March, sending Bitcoin (BTC) below $20k.

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Chinma Udeji
Professional Cryptocurrency Writer. I break down complex crypto topics into simple words.