{"id":1658,"date":"2023-03-03T14:02:11","date_gmt":"2023-03-03T19:02:11","guid":{"rendered":"https:\/\/embarrdowns.com\/silvergate-capital-plunges-to-record-low-on-concerns-about-future-viability\/"},"modified":"2023-03-03T14:02:12","modified_gmt":"2023-03-03T19:02:12","slug":"silvergate-capital-plunges-to-record-low-on-concerns-about-future-viability","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/silvergate-capital-plunges-to-record-low-on-concerns-about-future-viability\/","title":{"rendered":"Silvergate Capital Plunges to Record Low on Concerns About Future Viability"},"content":{"rendered":"

Silvergate Capital (ticker: SI) stock plunged to a record low on Thursday after the fintech firm disclosed doubts about its ability to continue doing business.[0]<\/a><\/sup> The stock declined 2% in premarket trading on Friday.[1]<\/a><\/sup><\/p>\n

In a Wednesday filing with the Securities and Exchange Commission (SEC), Silvergate said it requested additional time to evaluate \u201cinternal controls over financial reporting\u201d and to complete its audit procedures.[2]<\/a><\/sup> The firm noted it expects to record further losses as it sold additional investment securities \u201cbeyond what was previously anticipated and disclosed\u201d in January and February 2023.[3]<\/a><\/sup><\/p>\n

The company attributed the losses to a \u201ccrisis of confidence across the ecosystem\u201d and noted they will negatively impact the firm\u2019s and its subsidiary, Silvergate Bank\u2019s, regulatory capital ratios, potentially resulting in them being \u201cless than well-capitalized.\u201d[3]<\/a><\/sup><\/p>\n

The news sparked an exodus of crypto exchanges, stablecoin issuers, and trading desks that use Silvergate to facilitate payments.[4]<\/a><\/sup> Coinbase, Galaxy Digital Holdings, and Paxos Trust all announced they will no longer be accepting or initiating payments through Silvergate.[5]<\/a><\/sup> Stablecoin issuer Tether also confirmed it is not exposed to Silvergate.[4]<\/a><\/sup><\/p>\n

JPMorgan downgraded the stock from \u201cneutral\u201d to \u201cunderweight\u201d after the announcement and Bitcoin held steady above $23,400 on Thursday, fluctuating between $23,210 and $23,791.[5]<\/a><\/sup> In the morning, Ethereum was trading at an all-time high of $1,677, and by the afternoon, it had dropped to around $1,640[6]<\/a><\/sup> <\/p>\n

The troubles of Silvergate are a demonstration of the virus effect originating from the downfall of FTX cryptocurrency trading platform in November.[7]<\/a><\/sup> Last year, after FTX, a major customer, declared bankruptcy, the bank experienced a run on deposits.[7]<\/a><\/sup> The Department of Justice also recently opened an investigation into the bank\u2019s dealings with FTX and its sister company Alameda Research.[8]<\/a><\/sup> Silvergate is now evaluating the impact the growing problems will have on its \u201cability to continue as a going concern for 12 months following the issuance of its financial statements.[3]<\/a><\/sup><\/p>\n

0. <\/span>“The crypto winter is coming for Silvergate Capital” Quartz, 2 Mar. 2023, https:\/\/qz.com\/the-crypto-winter-is-coming-for-silvergate-capital-1850178407<\/a><\/a><\/p>\n

1. <\/span>“Silvergate Stock Slows Slide Despite Coinbase, Circle, More Ditching Crypto Bank” Barron’s, 3 Mar. 2023, https:\/\/www.barrons.com\/articles\/silvergate-stock-crypto-coinbase-circle-d233d5ae<\/a><\/a><\/p>\n

2. <\/span>“Will crypto-friendly bank Silvergate file for bankruptcy this weekend?” Protos, 3 Mar. 2023, https:\/\/protos.com\/will-crypto-friendly-bank-silvergate-file-for-bankruptcy-this-weekend\/<\/a><\/a><\/p>\n

3. <\/span>“Silvergate Capital Stock: Why It’s Time To Get Out (NYSE:SI)” Seeking Alpha, 2 Mar. 2023, https:\/\/seekingalpha.com\/article\/4583853-silvergate-capital-stock-time-get-out<\/a><\/a><\/p>\n

4. <\/span>“Coinbase, other big crypto names rush to ditch troubled bank Silvergate” Markets Insider, 3 Mar. 2023, https:\/\/markets.businessinsider.com\/news\/stocks\/crypto-silvergate-coinbase-gemini-circle-ditch-lender-payments-financial-troubles-2023-3<\/a><\/a><\/p>\n

5. <\/span>“Crypto Bank Silvergate Shares Crash Amid Investor Walkout, JPMorgan Downgrade” Bitcoinist, 2 Mar. 2023, https:\/\/bitcoinist.com\/silvergate-shares-crash\/<\/a><\/a><\/p>\n

6. <\/span>“Recovering Crypto Market Takes Hit as Silvergate Bank Future Questioned” Entrepreneur, 3 Mar. 2023, https:\/\/www.entrepreneur.com\/business-news\/crypto-market-takes-hit-as-silvergate-bank-future-questioned\/446850<\/a><\/a><\/p>\n

7. <\/span>“Bitcoin Sinks to Two-Week Low as Silvergate Fallout Hurts Crypto” Yahoo News, 3 Mar. 2023, https:\/\/news.yahoo.com\/bitcoin-sinks-two-week-low-024503929.html<\/a><\/a><\/p>\n

8. <\/span>“Silvergate Capital shares drop 57% after the crypto bank delays its annual report” CNBC, 2 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/02\/silvergate-capital-shares-crater-after-the-crypto-bank-delays-annual-report.html<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Silvergate Capital (ticker: SI) stock plunged to a record low on Thursday after the fintech firm disclosed doubts about its ability to continue doing business.[0]<\/a><\/sup> The stock declined 2% in premarket trading on Friday.[1]<\/a><\/sup><\/p>\n

In a Wednesday filing with the Securities and Exchange Commission (SEC), Silvergate said it requested additional time to evaluate \u201cinternal controls over financial reporting\u201d and to complete its audit procedures.[2]<\/a><\/sup> The firm noted it expects to record further losses as it sold additional investment securities \u201cbeyond what was previously anticipated and disclosed\u201d in January and February 2023.[3]<\/a><\/sup><\/p>\n

The company attributed the losses to a \u201ccrisis of confidence across the ecosystem\u201d and noted they will negatively impact the firm\u2019s and its subsidiary, Silvergate Bank\u2019s, regulatory capital ratios, potentially resulting in them being \u201cless than well-capitalized.\u201d[3]<\/a><\/sup><\/p>\n

The news sparked an exodus of crypto exchanges, stablecoin issuers, and trading desks that use Silvergate to facilitate payments.[4]<\/a><\/sup> Coinbase, Galaxy Digital Holdings, and Paxos Trust all announced they will no longer be accepting or initiating payments through Silvergate.[5]<\/a><\/sup> Stablecoin issuer Tether also confirmed it is not exposed to Silvergate.[4]<\/a><\/sup><\/p>\n

JPMorgan downgraded the stock from \u201cneutral\u201d to \u201cunderweight\u201d after the announcement and Bitcoin held steady above $23,400 on Thursday, fluctuating between $23,210 and $23,791.[5]<\/a><\/sup> In the morning, Ethereum was trading at an all-time high of $1,677, and by the afternoon, it had dropped to around $1,640[6]<\/a><\/sup> <\/p>\n

The troubles of Silvergate are a demonstration of the virus effect originating from the downfall of FTX cryptocurrency trading platform in November.[7]<\/a><\/sup> Last year, after FTX, a major customer, declared bankruptcy, the bank experienced a run on deposits.[7]<\/a><\/sup> The Department of Justice also recently opened an investigation into the bank\u2019s dealings with FTX and its sister company Alameda Research.[8]<\/a><\/sup> Silvergate is now evaluating the impact the growing problems will have on its \u201cability to continue as a going concern for 12 months following the issuance of its financial statements.[3]<\/a><\/sup><\/p>\n

0. <\/span>“The crypto winter is coming for Silvergate Capital” Quartz, 2 Mar. 2023, https:\/\/qz.com\/the-crypto-winter-is-coming-for-silvergate-capital-1850178407<\/a><\/a><\/p>\n

1. <\/span>“Silvergate Stock Slows Slide Despite Coinbase, Circle, More Ditching Crypto Bank” Barron’s, 3 Mar. 2023, https:\/\/www.barrons.com\/articles\/silvergate-stock-crypto-coinbase-circle-d233d5ae<\/a><\/a><\/p>\n

2. <\/span>“Will crypto-friendly bank Silvergate file for bankruptcy this weekend?” Protos, 3 Mar. 2023, https:\/\/protos.com\/will-crypto-friendly-bank-silvergate-file-for-bankruptcy-this-weekend\/<\/a><\/a><\/p>\n

3. <\/span>“Silvergate Capital Stock: Why It’s Time To Get Out (NYSE:SI)” Seeking Alpha, 2 Mar. 2023, https:\/\/seekingalpha.com\/article\/4583853-silvergate-capital-stock-time-get-out<\/a><\/a><\/p>\n

4. <\/span>“Coinbase, other big crypto names rush to ditch troubled bank Silvergate” Markets Insider, 3 Mar. 2023, https:\/\/markets.businessinsider.com\/news\/stocks\/crypto-silvergate-coinbase-gemini-circle-ditch-lender-payments-financial-troubles-2023-3<\/a><\/a><\/p>\n

5. <\/span>“Crypto Bank Silvergate Shares Crash Amid Investor Walkout, JPMorgan Downgrade” Bitcoinist, 2 Mar. 2023, https:\/\/bitcoinist.com\/silvergate-shares-crash\/<\/a><\/a><\/p>\n

6. <\/span>“Recovering Crypto Market Takes Hit as Silvergate Bank Future Questioned” Entrepreneur, 3 Mar. 2023, https:\/\/www.entrepreneur.com\/business-news\/crypto-market-takes-hit-as-silvergate-bank-future-questioned\/446850<\/a><\/a><\/p>\n

7. <\/span>“Bitcoin Sinks to Two-Week Low as Silvergate Fallout Hurts Crypto” Yahoo News, 3 Mar. 2023, https:\/\/news.yahoo.com\/bitcoin-sinks-two-week-low-024503929.html<\/a><\/a><\/p>\n

8. <\/span>“Silvergate Capital shares drop 57% after the crypto bank delays its annual report” CNBC, 2 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/02\/silvergate-capital-shares-crater-after-the-crypto-bank-delays-annual-report.html<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1657,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1658"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1658"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1658\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1657"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}