Cryptocurrency is not immune to short selling

02/22/2023 03:18 • NFT Newsflash • 247 views

According to reports, MarketWatch data shows that the shares of Cryptofriendly Bank Silvergate have become the most short-selling stocks on Wall Street. Among all Silvergate stocks available for investors to buy and sell, short-selling stocks account for 73.5%, ranking first. Silvergate’s share price fell to $16.08 on Tuesday, down about 11%, 92% from the record high of $222.13 set in November 2021.

The shares of Cryptofriendly Bank Silvergate have become the most short-selling stocks on Wall Street, and Soros is one of the main drivers

Interpret the above information:

The cryptocurrency market takes the spotlight as it continues to evolve digitally. Many investors have taken the opportunity of establishing investment portfolios in cryptocurrency, therefore expanding the market. However, being part of the mainstream market also means facing the same risks that traditional investments face, including short-selling.

According to the recent reports, Cryptofriendly Bank, Silvergate, has become the most short-selling stock on Wall Street. Short selling refers to the activity of selling stocks that an investor does not have, hoping for the price to go down, so they can buy stocks at a lower price and profit off the difference. In Silvergate’s case, short-selling stocks account for 73.5% of all Silvergate stocks available to investors.

The percentage is not something to be taken lightly because it indicates that investors have reported a lack of trust in the bank. The stock market is driven by investor confidence, and if most investors do not believe in a particular stock’s potential, it could result in decreased demand, further driving down the price.

The decrease in Silvergate’s share price is due to the lack of confidence in the bank. On Tuesday, it hit $16.08, which is an 11% drop from its previous stock price. Its record high of $222.13 set in November 2021 highlights the drastic dip in its share price.

Silvergate bank is known for being cryptocurrency-friendly, which means that they have services catering to institutional investors in the cryptocurrency world. However, their cryptocurrency-friendly status does not mean that they are immune to the short-selling risks that permeate the stock market. In addition, the crypto market is known for its volatility, and investors who are not able to handle the risk that comes with it may find it challenging to maintain a portfolio in it.

In conclusion, the cryptocurrency market may have made significant strides in the investment sector, but it still carries the same risks as traditional investments. The short-selling of Silvergate bank stocks is an indicator that no investment is exempt from the fluctuations of the stock market. Investors should remain vigilant and understand the risks that come with investing in the cryptocurrency market.

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