Shares of crypto company Silvergate in a vertical fall
2023.03.06 11:07
Shares of crypto company Silvergate in a vertical fall
By Tiffany Smith
Budrigannews.com – Silvergate Capital shares (NYSE:) After the bank said it doubted the business’s viability and suspended its crypto payments network, Corp fell 10% in early Monday trading.
Late on Friday, the crypto-focused bank said that it had made a “risk-based decision” to immediately end the Silvergate Exchange Network (SEN).
Analysts at Wedbush stated, “The SEN is Silvergate’s main flagship product that was the primary attraction for depositors to bring funds to the bank.”
They added that Silvergate may be considering ceasing operations as a result of the discontinuation.
Signature Bank, a cryptocurrency lending rival (NASDAQ:) also lost about 2.5 percent in morning trading, while cryptocurrency exchange Coinbase (NASDAQ:) Global was nearly down 1%. BTC mining equipment manufacturers Ebang International and Canaan Inc., crypto firm Riot Platforms Inc., and crypto firm Riot Platforms Inc. both lose between one and two percent.
According to Bernstein brokerage analysts, “the crypto market reacted to the negative news from Silvergate Bank, with both bitcoin and ethereum down about 4.8 percent for the week.”
On Friday, Silvergate shares fell to a record low of $4.86, erasing more than $7 billion from the company’s market capitalization and losing nearly 98% of their value since their all-time high close in November 2021.
The shares of a crypto-friendly bank fall as the industry faces winter.
According to Wedbush analysts, “We believe a receivership/liquidation scenario is a distinct possibility and arrive at a liquidation value of $5 per share.” The stock’s previous close is roughly 13% lower than the estimated price.
Coinbase Global is among a slew of crypto giants that have parted ways with Silvergate as their banking partner.
After investors withdrew $8 billion in deposits from the bank in the final three months of the year due to the collapse of Sam Bankman-Fried’s crypto exchange FTX in November, the company has been having trouble staying afloat.
Silvergate reported a $1 billion net loss in the fourth quarter as crypto-related deposits fell.
