Silvergate lost $1 billion in just three months is worse than bankruptcy.
For most of you here who have never heard of Silvergate, let me take a moment to talk about the company.
Silvergate is not a crypto company so don't confuse it. It is an American bank based in California that focuses on cryptocurrency and that is why the company is so popular in the US and California to accept crypto as payment and transaction. However, Silvergate lost half of its profits since 2013, amounting to about $1 billion in just one year.
Recently, Silvergate announced the layoff of 40% of its employees during the bear market. This also created a further issue with what the Genesis Crypto lender is going through as it transpired that Genesis parent company Digital Currency Group (DCG) invested $114 million in Silvergate Capital to support the bank's fintech deposit program.
Now the new announcement is that the bank says it lost $1 billion in the last three months of last year's bear market. How can it be in just three months alone. Although we went through a tough time in the last 3 months of the year 2022. At that time, Bitcoin touched almost $14,000, and then the populous FTX went bankrupt, and so many bad incidents that complicate the journey in the crypto space. But nevertheless, why did this happen to Silvergate, which is not fully part of the Crypto company, and despite the heavy losses, the Silvergate exchange network continues to increase in transactions during that time.
The exchange network known as "SEN" increases in transaction during the loss in the fourth quarter of 2022 up with 5%, which is equivalent to $117.1 billion dollars. Although that does not exceed the increase in the fourth quarter of the previous year, 2021. In 2021, the net income attributable to various shareholders of Silvergate was $75 million, but this reversal to loss in 2022, and the net loss attributable to the shareholders of December, was
a loss of $948.7 million, which is a loss of $30.07 per shareholder.
Yes! been said that customer withdrawals affected Silvergate, but I don't think that should be a problem. Customers withdraw their assets and it's theirs, not Silvergate.
I don't know if the bear market was so bad that a bank lost those huge sums in just 3 months of bear. What I believe now is that Silvergate has also been exposed to FTX native token FTT.
And to be fair, Silvergate's loss is huge and even worse than most crypto companies that went bankrupt.
