Why Silvergate Capital Collapsed 50% in November
Shares of Silvergate Capital (NYSE: SI) plummeted 51.7% in November, according to data from S&P Global Market Intelligence, as the crypto bank collapsed under the weight of the FTX scandal that saw the cryptocurrency exchange file for bankruptcy.
Investors have begun to fear a bank run at Silvergate, or what will happen when customers rush to withdraw their deposits because they believe the bank might go under. Silvergate has said its exposure to FTX is minimal, around 10% of its $11.9 billion in deposits. But $1 billion or so is still a lot of money for the bank, and the current investor anxiety could precipitate others wanting to get their funds out.
Silvergate is also facing potential class action lawsuits surrounding its involvement with the alleged fraud at FTX and whether its principals were involved in facilitating it.
Source Fool.com
