Silvergate Capital: The organization that got away unscathed amid the FTX mess
Silvergate Capital, a prominent provider of financial solutions and services, could be considered as one that hadn’t been impacted as much by the FTX debacle. Furthermore, the company had been trading well in the market after it came to light thata its exposure to FTX had been relatively low.
Silvergate Capital (SI) released a press statement on 11 November. In the press release, the organization declared that, as of September 30 2022, its total deposits from all digital asset customers totaled $11.9 billion. However, FTX represented less than 10% of its total deposits. Silvergate neither had outstanding loans nor investments in FTX, and FTX wasn’t a custodian for Silvergate’s bitcoin-collateralized SEN Leverage loans.
This amount that stood worth of nearly $1 billion, which meant that FTX was a creditor.
“To be clear, our relationship with FTX is limited to deposits,” said Alan Lane, Chief Executive Officer, Silvergate Capital. “As a federally regulated banking institution that is well capitalized, we maintain a strong balance sheet with ample liquidity to support our customers’ needs,” he added.
Gliding through in tough times
Shares of Silvergate Investments plummeted over 20% on 8 November and fell to a little over $42. Furthermore, the company’s shares kept falling over the next two to three days. Additionally, as of 11 November, each share traded at a price of $30.38.
However, the organization’s shares rallied once Silvergate Capital released its statement. The price trend quickly reversed. The press time price for each share stood at $34.42.
On 9 November, BTIG analyst Mark Palmer tweeted that he had spoken to Silvergate President Ben Reynolds. He also confirmed that FTX’s challenges have had no direct impact on Silvergate, as the company neither held FTT tokens nor lends against the same.
BTIG on Silvergate Capital (SI, Buy, $135 PT): Discussion With SI President Reynolds Addresses Reasons Why FTX’s Woes Unlikely to Translate Into Problems for SEN Network and SEN Leverage Implied by Extent of Stock’s Selloff During Today’s Session – #btig— Mark Palmer (@PalmerBTIG) November 9, 2022
Ever since FTX’s debacle began, the market witnessed a steep decline. The prices of most of the crypto tokens have significantly dropped.
At the time of writing, Bitcoin [BTC] traded at $16,729.57 (a drop of 20%), while the biggest altcoin, Ethereum [ETH], traded at $1,255.5 (a drop of 22%). Binance Coin [BNB] traded at $273.17 (a drop of 22%), Dogecoin [DOGE] traded at $0.08001 (a drop of 32%), and Shiba Inu [SHIB] is trading at $0.000009341 (a drop of 23%). Polygon [MATIC] traded at $0.9471 (a drop of 27%), while Polkadot [DOT] traded at $5.64 (a drop of 24%).Source