crypto savings deposits Crypto Deposits Keep Flowing Into Silvergate Bank Amidst Market Downturn

Crypto Deposits Keep Flowing Into Silvergate Bank Amidst Market Downturn

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Silvergate Capital Corporation announced a steady stream of crypto deposits in the second quarter.

Deposits in the second quarter totaled $13.3 billion, down from $14.7 billion in the previous three months.

Diluted earnings per share went up to $1.12, exceeding Wall Street estimates of $0.84.

Silvergate is a regulated, institutionally-focused bank whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

Silvergate managed to increase its customer base from 1503 at the end of March to 1585 at the end of June, while fee income dipped from $8.9 million in Q1 2022 to $8.8 million in Q2.

Despite being an institutional lender of USD against bitcoin collateral, Silvergate saw no liquidations during the credit crisis that started with crypto bank Celsius pausing withdrawals.

The banks transfer system, the Silvergate Exchange Network, through which crypto companies like Coinbase, Gemini, and Kraken move funds between each other, serviced $191.3 billion in transfers in Q2.

Silvergates CEO touted the platforms robustness that was able to emerge from the market downturn relatively unscathed.

The first institutional customer acquired by Silvergate was SecondMarket in 2013.

By introducing the Silvergate Exchange Network, the company eliminated some of the lost opportunities experienced by customers trying to do 24/7 bitcoin business with traditional banks operating a 40-hour work week.

Silvergate acquired assets from Metas failed Diem stablecoin project in Feb. 2022 for $182 million.

The CEO Alan Lane said it plans to launch its own regulated stablecoin in partnership with a consortium of banks in 2022.


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