Silvergate Bank’s (SI) woes, including the shutdown of its crypto lending platform, SEN, aren’t necessarily moving the price of bitcoin (BTC), Hany Rashwan, CEO of cryptocurrency company 21.co, said. Rather, he attributed recent price levels to macroeconomic factors.
“We don’t see too much of a material impact on the price [of bitcoin] from Silvergate,” Rashwan told CoinDesk TV’s “First Mover” on Monday. “I would obviously concede that it’s one of several factors that’s driving the price right now.”
Last week, California-based Silvergate said it would be suspending its 24/7 crypto exchange service, citing contagion concerns from the implosion of FTX and further regulatory scrutiny. The platform, which allowed its client to make transactions at any time, was used by major crypto players, including Kraken, Gemini and Binance.US.
Silvergate’s story has yet to be defined, Rashwan said, but bitcoin's price performance is now being influenced by macroeconomic factors, including inflation, which he said “is still both rampant and here.”
Federal Reserve Chairman Jerome Powell is set to testify before a Senate committee Tuesday. Whether the Fed will increase interest rates again is likely, according to Rashwan. But pinpointing the connection between inflation and an asset like bitcoin “remains to be seen.”
“I don’t think we’re out of the woods yet,” he said. “We will continue to see these [interest] rate rises,” he added, but whether the market has priced that in “it's really difficult to show right now.”
Additional macro factors, including China’s loosening of its COVID-19 restrictions, could also drive a rally in the digital asset moving forward, Rashwan said, adding that “it’s definitely helpful.”
“A lot of East Asian traffic was subdued for quite some time due to a number of factors, both economic and political,” Rashwan added.
Nonetheless, China’s “opening up is clearly bullish, and sending a lot of buy signals,” he said.
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