After Losing 70% of Its Deposits, Where Does Silvergate Capital Go From Here?
The crypto bank Silvergate Capital (NYSE: SI) has found itself on the ropes after a difficult fourth quarter in which it saw close to 70% of its digital-asset-related deposits leave the bank.
The FTX debacle triggered a crisis of confidence in crypto, which in turn triggered a run on the bank. Silvergate appears to have survived the event, but it wiped out a significant amount of shareholders' equity in the process because it had to sell bonds while they traded at a loss to meet the deposit outflows. The bank took a hefty more than $1 billion loss in the fourth quarter.
While crypto has since bounced back a bit in 2023, it still very much feels like a risk-off environment for crypto, which raises the question of where Silvergate goes from here.
Source Fool.com
