Silvergate capital shares under pressure through FTX debacle

Silvergate capital shares under pressure through FTX debacle

are Silvergate Capital among the publicly traded crypto names affected by the falling share prices that were triggered by the sudden market depression this week.

Silvergate, a US bank, which focused on digital assets, has attracted the attention of Wall Street analysts and analyzed how strongly the company was exposed to the collapse of digital assets triggered by FTX and Alameda Research.

In a tense liquidity environment, financial services companies can come under pressure to process increasing payment applications, as was the case with FTX.

ftx is A silvergate-kunde Sam Bankman-Fried on the homepage his Silvergate Exchange Network (sen), in which he "one of the most important backbones of the settlement level for Cryptocurrencies ”calls.

The bank offers institutional investors Bitcoin-supported loans and says that it has lending or conservation levels as well as plenty of cash and short-term securities such as US trasuries to enable its customers at any time.

Nevertheless, the share of Silvergate from 23% Tuesday - and almost 85% last year.

Although customers were able to make deposits and withdrawals without interruption, industry participants postulated the potential for a shift if the market conditions were to deteriorate.

John Popeo, a consultant for financial services regulation, said: "An uncomfortable topic for crypto companies as well as for traditional financial companies such as banks is the intersection of crypto and tradfi, and I think we will make a lot more of this conversations."

a source familiar with the matter said that the Silvergate record was "built up" so that "it does not get into a situation like some of the actors in the crypto industry out there in which they have a liquidity crisis".

Alan Lane, CEO of Silvergate, said in a statement that the regulated company uses its balance sheet

"Provision of liquidity for our customers while maintaining a strong capital position that goes beyond the capital reimbursement required by the Bundesbank regulations."

The source said that Silivergate had a "highly liquid balance" that consists of $ 1.5 billion in loans and estimated $ 13.5 billion in liquid securities and cash.

Silivergate-shares closed the trade to $ 32.68 at $ 2.01

Michael Bodley contributed to reporting.

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The article Silvergate Capital Share's Pressureed by FTX Debacle is not a financial advice.