Analyst Raises Concern Over Silvergate Bank’s Future Prospects
- DeFi Surfer published a blog describing the decline of Silvergate Bank.
- The bank experienced peak success in 2021 but has since been falling, with its stock value at 97% lower than its peak.
- The blog post also reviews the current condition of Signature Bank (NASDAQ:) in comparison to Silvergate.
DeFi Surfer, a crypto and financial market analyst, recently published a blog post that caught the attention of many by describing the downfall of Silvergate Bank, a leading crypto trading institution. After reaching the peak of its success in 2021, the company is now at risk of an uncertain future ahead.
The blog post highlighted the success of Silvergate Bank after its 2019 IPO, with the bank’s deposits increasing from $2 billion to $14 billion, and its stock prices rising 1600%. However, the bank is now experiencing an immense drop in its stock value, with 97% lower than its peak.
DeFi Surfer also mentioned that during the crypto upcycle, Silvergate’s performance was quite satisfactory as the bank was well-suited to be the provider of a “rapidly growing and cheap deposit base”, which is highly valuable.
The content creator then went on to explain the main cause of Silvergate’s downfall, which is the increase in interest rates. By the end of the third quarter of 2022, the bank had a loss of over $1 billion. This further forced Silvergate to sell off $6 billion of its securities, resulting in a loss of almost $900 million and wiping out 70% of the company’s common equity.
In addition, DeFi Surfer also looked at the current situation of Signature Bank, analyzing whether the bank would be the next to face a similar fate as Silvergate.
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