Federal Reserve Chairman Jerome Powell’s recent announcement on Tuesday suggested that there may be a higher and more sustained increase in interest rates than initially anticipated. The gradual increase in interest rates over the past year has had a negative impact on high-risk investments like stocks and cryptocurrencies. This announcement may have further contributed to the sell-off in the cryptocurrency market.

As per Yuya Hasegawa, an analyst at Bitbank, a Japanese cryptocurrency company, who spoke with CNBC,

There is just little reason to buy bitcoin now as the market is saturated with negative developments, not just specifically for the crypto industry, but also for the wider financial market as well.

In addition to the factors previously mentioned, the cryptocurrency market has also been affected by the recent collapse of Silvergate Capital, a major lender to the industry. On Wednesday, Silvergate announced that it is liquidating its bank and winding down its operations, citing financial difficulties. This development is another example of the ripple effect of the collapse of FTX, a major cryptocurrency exchange, which was a significant customer of Silvergate.

Furthermore, the closure of Silicon Valley Bank by the Federal Deposit Insurance Corporation on Friday morning has also contributed to the uncertain environment surrounding the cryptocurrency market. This marks the largest bank failure in the United States since the global financial crisis. SVB Financial, the bank’s parent company, disclosed that it sold off $21 billion of its holdings at a loss of $1.8 billion. Silicon Valley Bank was a significant financial institution in the technology start-up sector.