Alas, Even Banks Are Trapped Due to the Collapse of the FTX Crypto Exchange!
Silvergate Capital, a bank specializing in cryptocurrencies, reported a loss of $1.05 billion in the fourth quarter of 2022. Compared to last year, a year earlier, it had reported a profit of $18.4 million.As a result of a string of bankruptcies of high-profile industry players that rocked the crypto industry and led to large withdrawals at the bank, Silvergate lost $33.16 on a per-share basis, compared with a profit of 66 cents a year earlier.The California-based bank reported that it suffered a large loss in deposits during the quarter and has taken steps to improve its liquidity, including laying off nearly 40% of its workforce. According to Silvergate's official statement, the company expects a prolonged period of reduced deposits across the broader crypto market.At a time when we remain committed to taking decisive action through the scrutiny of the current environment. We still believe in the digital asset industry. To that end, we are committed to maintaining a highly liquid balance sheet with a strong capital position.According to a Silvergate report, the company sold $5.2 billion worth of debt securities during the quarter and reported a $751.4 million loss on those transactions. In addition, it reported an impairment charge of $134.5 million related to $1.7 billion worth of securities it plans to sell in the current quarter to reduce its borrowings.The collapse of cryptocurrency exchange FTX forced Silvergate Capital Corp to sell assets at a significant loss to meet withdrawals of about $8.1 billion. Because of the urgency, the bank is obliged to liquidate the assets.Despite the lackluster fourth quarter statistics, Silvergate ( SI ) shares are now trading at a pre-market valuation of $14, which is a staggering 5.8% increase compared to the 40% intraday decline witnessed in the first week of January.
Silvergate Capital, a bank specializing in cryptocurrencies, reported a loss of $1.05 billion in the fourth quarter of 2022. Compared to last year, a year earlier, it had reported a profit of $18.4 million.
As a result of a string of bankruptcies of high-profile industry players that rocked the crypto industry and led to large withdrawals at the bank, Silvergate lost $33.16 on a per-share basis, compared with a profit of 66 cents a year earlier.
The California-based bank reported that it suffered a large loss in deposits during the quarter and has taken steps to improve its liquidity, including laying off nearly 40% of its workforce. According to Silvergate's official statement, the company expects a prolonged period of reduced deposits across the broader crypto market.
At a time when we remain committed to taking decisive action through the scrutiny of the current environment. We still believe in the digital asset industry. To that end, we are committed to maintaining a highly liquid balance sheet with a strong capital position.
According to a Silvergate report, the company sold $5.2 billion worth of debt securities during the quarter and reported a $751.4 million loss on those transactions. In addition, it reported an impairment charge of $134.5 million related to $1.7 billion worth of securities it plans to sell in the current quarter to reduce its borrowings.
The collapse of cryptocurrency exchange FTX forced Silvergate Capital Corp to sell assets at a significant loss to meet withdrawals of about $8.1 billion. Because of the urgency, the bank is obliged to liquidate the assets.
Despite the lackluster fourth quarter statistics, Silvergate ( SI ) shares are now trading at a pre-market valuation of $14, which is a staggering 5.8% increase compared to the 40% intraday decline witnessed in the first week of January.
