Silvergate Tumble – Silvergate is Forced to Sell Assets ๐Ÿ“‰

Table of Contents

Silvergate Tumble – Silvergate is Forced to Sell Assets

Crypto-focused US bank Silvergate has been forced to sell assets after clients withdrew $8.1bn in deposits in late 2022. The California-based company’s deposits fell to $3.8bn on 31 December from $11.9bn at the end of September, causing its shares to drop 40% in pre-market trading in New York. Silvergate, a Federal Reserve member bank listed on the NYSE, has come under pressure as crypto asset prices have fallen and several big players have gone bankrupt. In a provisional Q4 earnings report, Silvergate said it sold $5.2bn of debt securities at a loss of $718m to meet customer withdrawals and raise cash. It added that $150m of its deposits were from customers that had filed for bankruptcy.

The bank also announced that it is cutting 200 employees, or 40% of its staff, due to the “economic realities” facing the cryptocurrency industry and its business. Silvergate reported holding $4.6bn in cash and equivalents, more than its deposits, and $5.6bn in US government and agency-backed debt. The company plans to sell “a portion” of this debt in early 2023. Silvergate’s full quarterly and annual earnings report will be released on 17 January. The bank is also facing scrutiny from US lawmakers, with Senators including Elizabeth Warren writing to CEO Alan Lane in December to request clarity on Silvergate’s role in accepting customer deposits for crypto investment firm Alameda Research, which were ultimately intended for the FTX exchange.

Want to learn how to invest? Download the Invstr app, where you can play Fantasy Finance and manage a virtual investment portfolio or open a brokerage account and invest for real. Take our interactive investing course on Invstr Academy and become a better investor today!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visaยฎ Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.