As Silvergate weighs down on the market, CryptoQuant data shows that both the number of active addresses and transactions have dropped significantly.
As the market tries to figure out what to do next after the collapse of Silvergate Bank, which ended with its “voluntary liquidation” on Wednesday U.S. time, Bitcoin traders are taking a break and thinking about what to do next.
Data from CryptoQuant shows that the number of BTC transfers has dropped by 35% in the last 24 hours. During the same period, the total number of Bitcoin transactions has dropped by 17%, and the number of active addresses has dropped by 10%.
According to data from CoinGecko, the average amount of bitcoin traded during the month of March was around $25 billion. This is less than the average amount of bitcoin traded in February, around $36 billion.
“Along with the drop in the price of bitcoin, we have seen a noticeable drop in trading volumes across the ecosystem,” Guilhem Chaumont, CEO of Paris-based market maker and brokerage Flowdesk, told CoinDesk in a note.
Silvergate was one of the most important fiat payment rails in the cryptocurrency market. Exchanges and market makers could use Silvergate to get traditional banking services. Since Silvergate’s problems became public, the number of trades has decreased.
Chaumont said that trading has been quiet since then, which could mean that the first shock has been priced in and traders are taking time to figure out what’s going on.
“It feels like “the calm before the storm.” So the market isn’t getting over it. “FTX has shown us all that anything can happen,” he said. “However, the situation could still go either way. If news came about a solution that made people feel better, the confidence that marked the first two months of 2023 could return.”
The end of Silvergate could speed up the move towards trading pairs based on dollar-backed stablecoins like Tether (USDT).
“With the end of Silvergate, traders will likely use stablecoins even more often. Instead of putting your money in an exchange, you put it in a stablecoin issuer, get stablecoins, and then put those stablecoins in an exchange. “In a note on Monday, analysts at the Paris-based crypto data company Kaiko said.