Home
News
Given the current macroeconomic conditions because of sensitive geopolitical situations, the liquidity outflow seems to gain pace. Crypto space is among those markets that have the hardest hits from the instance. This could be clearly inferred from the statement of Silvergate Capital Corporation.
The parent company of crypto bank Silvergate Bank said that the bank has seen a significant decline in deposits from its customers. It added that during the Q4, a transformational shift was seen that made the confidence within the ecosystem getting shattered. Because of this losing confidence, the shift in customers behavior and risking off their positions over different trading firms dealing in crypto.
The business suffered a $1.0 billion net loss for the fourth quarter, or a loss of $33.16 per common share, according to Silvergate. In contrast to the Q4 results, Q3 2022 net income of $40.6 million, or $1.28 per dilutive share, was obtained.
Silvergate Capital’s most recent financial statements reveal that due to the significant losses in Q4, the business lost $948.7 million altogether in 2022, or $30.07 per common share.
According to a story published earlier in the beginning of January, Silvergate Bank’s shares suffered greatly after it came to light that its clients had withdrawn more than $8 billion in deposits in just the fourth quarter.
Because of this and the adverse conditions that have persisted in the cryptocurrency market since May 2022, Silvergate claimed that it was compelled to sell debt securities at a loss of around $718 million. The bank also announced that it will “take an impairment charge of $196 million” on the blockchain-based payment system it purchased from Diem.
Silvergate CEO Alan Lane made the following statement in response to the organization’s most recent financial results: “While we are making quick decisions to manage the current market, our goal has not altered. We have faith in the future of the digital asset market, and we’re still committed to giving our key institutional clients value-added services. In order to do this, we are dedicated to preserving a very liquid balance sheet and a solid capital position.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
