Why Silvergate Capital Stock Jumped as Much as 23% Today
Shares of Silvergate Capital (NYSE: SI) are soaring today. The stock rose as much as 23.2% at 10:30 a.m. ET, backing down to a still-impressive 16.3% gain at 1 p.m. ET. As an independent bank with a tight focus on the cryptocurrency industry, Silvergate enjoyed two simultaneous but separate tailwinds.
First, President Joe Biden signed an executive order that outlined a "whole-of-government" effort to set up a legal and regulatory framework for trading and ownership of cryptocurrencies. The order contains measures to stabilize the crypto market while lowering the financial risks of digital assets. That's nothing short of stellar news for Silvergate because the bank is mercilessly exposed to the crypto sector's financial risks. Furthermore, every player in the cryptocurrency sector is yearning for a proper legal system. The lack of clarity on issues such as trading limits and taxation adds more fuel to the market's built-in risks and uncertainties, so any baby step in the direction of firm guidance should be seen as a positive change.
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Source Fool.com
