Why Silvergate Capital Stock Gained 10% on Wednesday
Shares of Silvergate Capital (NYSE: SI) had gained 10.1% as of 3:05 p.m. ET on heavy trading volume. The jump was a welcome respite from Silvergate's plunging price trend in recent weeks, as the crypto-friendly bank was hit by fallout from the FXT crypto exchange's financial meltdown. FTX-related concerns drove Silvergate's stock 26% lower between Nov. 7 and Tuesday's closing bell. Some of those dark clouds lightened up slightly on Wednesday.
Silvergate's 12% price drop last Friday started when the institutional crypto trading service FalconX halted its use of the Silvergate Exchange Network (SEN) "out of an abundance of caution." Investors feared that other crypto exchanges might follow suit, perhaps damaging the SEN platform and causing a bank run on Silvergate itself.
Today, FalconX has reassessed the situation and reached the conclusion that SEN is a safe place to do business. Therefore, the exchange is doing business as usual on the Silvergate platform again.
Source Fool.com
