The crypto banks are strugglingIt’s been a year to forget for crypto banks, and the worst part is it looks like there’s more suffering to come.
- Crypto bank Silvergate has finally been hit by the crypto winter chill, with its share price plummeting more than 22% on Tuesday. The losses were fueled by a lacklustre earnings report showing EPS of $1.28 compared to the $1.46 predicted by analysts.
- The group’s internal exchange, SEN, also saw some pretty nasty declines, with its volume declining by 41% over the course of Q3. Its revenue from fees also saw a 10% drop over the same period, falling from $8.8m to $7.9m. All in all – it’s been a tough quarter.
- The whole thing’s put a spanner in the works for its planned stablecoin launch, which has been in the works since purchasing Meta’s failed startup Diem in January. It’s not alone in the struggle tho, as competitor Signature Bank also felt the heat with 6% losses on the month.
Illustration by TradingView
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Silvergate gets a gold starBank of America thinks crypto-focused bank Silvergate Capital is a good opportunty to get into the crypto bizz without actually getting into the crypto bizz.
🔍 Key points:
- The bank saw shares lift just under 6% in day trading on Monday to hit their highest price since January 5, before getting brought down by a meh day in crypto to close up 1.24%.
- A bullish BofA is to thank for this one. The investment bank initiated coverage on Silvergate on Monday with a Buy rating and a $200 price target, implying an upside of nearly 50% on the way for the stock.
- They think Silvergate has a “first mover advantage” and offers a solid alternative to get exposure to the growth of digital assets instead of owning actual crypto, as well as having a “long runway” to growth amid booming institutional interest. One to watch?
Billy Hathorn / Wikimedia Commons