Silvergate Reveals Positive Financial Data, Shares Rebound

Silvergate, the financial institution oriented to the crypto industry, released data related to its fourth quarter, 2022. Following the collapse of one of its partners, crypto exchange FTX, the bank saw over $8 billion in customer withdrawals leading to rumors about its potential bankruptcy. 

Today, Silvergate has set some minds and hearts at ease as the bank revealed that it has enough assets and liquidity to continue its operations. According to the data, the financial institution has over $11 billion in total assets as of December 31s, 2022, with $6 billion in deposits. 

Silvergate assets and deposits. Source: Silvergate, Q4, 2022 financial report

Hope At The End Of The Tunnel?

However, as the image above shows, the financial institution did experience massive losses across the board. Per their financial report, deposits fell by over $8 billion while the company recorded a net loss of $948 million. 

The bank’s flagship product, the Siilvergate Exchange Network (SEN), enables 24/7 transfer between its customers and saw a 4% spike in its dollar transfers in Q4 2022. Despite this increase, the payment solution still recorded a decrease of around $250 million in its year-to-year transaction volume. 

Crypto customers followed the trend, as the collapse of FTX and the bankruptcy of other major crypto companies triggered a widespread “confidence crisis.” By the end of 2022, the financial institution recorded 1,620 crypto customers compared to 1,677 in September 2022. 

Overall, the financial institution could still capture the attention of crypto investors. Despite the persistent downside price action across digital assets and the “confidence crisis,” the bank saw an increase in crypto investors compared to December 2021, when only 1,381 “digital asset customers” used the platform. 

As a result of this financial data, Silvergate’s (SI) shares saw a boom in its pre-market open and market price action. As of this writing, SI trades at $16, rebounding from a year low of around $10. Still, the company is far from its yearly high of $20 and its $240 all-time high.

Silvergate SI SIUSD
SI’s price sees small profits during today’s trading session on the daily chart. Source: SIUSD Tradingview

Silvergate Expects More Issues, The Worst Is Yet To Come?

The financial institution announced additional measures to ensure liquidity and a positive cash balance. These measures include letting go of over 40% of its workforce, selling debt, evaluating its product portfolio, and more. 

Alan Lane, CEO of Silvergate, stated the following: 

While we are taking decisive actions to navigate the current environment, our mission has not changed. We believe in the digital asset industry, and we remain focused on providing value-added services for our core institutional customers. To that end, we are committed to maintaining a highly liquid balance sheet with a strong capital position.

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