If this is not contagious: Silvergate Bank, Californian bank specializing in the sector of cryptocurrency, closes its doors and liquidates everyone.
He communicated it Silvergate Capital Corporation, the holding company that controls the bank, announcing the orderly liquidation of the operations of the credit institution on a voluntary basis. “In light of recent industry and regulatory developments, Silvergate believes the best course of action is the orderly cessation of activities of the bank and yours voluntary liquidationthe company wrote in a statement. “The bank's closure and liquidation plan includes the full refund of all deposits".
The news was followed by the collapse of stocks and bitcoin
Yesterday, the shares of Silvergate Capital Corp (NYSE:SI) tumbled about 36% in after-hours trading on Wall Street following the company's announcement. In today's pre-market, the stock is sinking 42% to $2,84, down 96% over the past 12 months. In November 2021 it had reached an all-time high and a Silvergate share was paid $222,
In the same way, the Bitcoin it broke a key support yesterday, according to technical analysis, and continues to plunge today, shedding 9,30% to $19.638,3 for a total one-week loss of 11%, with investors racing to unfurl the positions. In November 2021, Bitcoin was close to 70 thousand dollars.
The carryover effect from the market decline and other bankruptcies in the sector
The decision was influenced by the cryptocurrency bear market , bankruptcy of some companies in the sector, starting with Ftx, the exchange founded by the controversial Sam Bankman Fried which went bankrupt last November, with which the company had financial ties. Decisive, then, the collapse of deposits, passed in the fourth quarter from 8,1 billion to 3,8 billion.
Bank accounts may have been under pressure since pressure from US regulators, according to industry experts. Concerns about Silvergate's activities started last week when the bank announced it would be late in submitting its annual report to the Sec, the US financial markets supervisory authority.
Fears for other infections
The other big question that the bankruptcy of the crypto-bank raises concerns the issue of any infections, linked to the interweaving of the financial institution with other players in the industry. In recent days the Coinbase exchange listed at Nasdaq he was quick to communicate that he has minimal exposure in Silvergate. Despite this, on March 9th the shares lost more than 6% positioning themselves below 60 dollars and very far from the highs of 360. The MicroStrategy shares, the software company led by Michael Saylor and linked to the performance of the cryptocurrency since it holds 132.500 Bitcoins, or 0,63% of the maximum offer foreseen by the cryptocurrency protocol. In the last session, MicroStrategy stock lost 4%. The software company has an outstanding loan with Silvergate worth $205 million. According to KWB analysts, the loan was “significantly over-collateralized with Bitcoin. "We currently have no information on how or at what value this loan could be liquidated."
