Crypto stocks fall as Silvergate crisis deepens

March 6 (Reuters) – Shares of cryptocurrency-related companies fell in premarket trading on Monday, following doubts over whether Silvergate Capital Corp ( SI.N ) could keep its business in its crypto payments network viable.

The digital assets-focused bank said late on Friday that it had immediately implemented a “risk-based decision” to shut down Silvergate Exchange Network (SEN).

Shares of the La Jolla, California-based bank fell more than 4% in pre-market trading, while crypto lending peer Signature Bank ( SBNY.O ) fell 3%. Crypto exchange Coinbase Global ( COIN.O ) and BTC mining machine maker Ebang International both fell 1% each.

“The crypto market responded to negative news from Silvergate Bank, with both Bitcoin and Ethereum down ~4.8% for the week,” analysts at brokerage Bernstein said in a trade note.

As several crypto heavyweights, including Coinbase Global and Galaxy Digital, dropped Silvergate as their banking partner, the lender’s recent filing raised questions about its ability to continue.

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Shares of Silvergate hit a record low of $4.86 on Friday, shedding nearly 98% of their value since its record close in November 2021 and wiping more than $7 billion from the company’s market capitalization.

The firm has been struggling to stay afloat since the collapse of Sam Bankman-Fried’s crypto exchange FTX in November, prompting investors to pull $8 billion in deposits from the bank in the last three months of the year.

Silvergate reported a net loss of $1 billion in the fourth quarter.

Reporting by Manya Saini in Bangalore; Cinematography by Anil de Silva

Our Standards: Thomson Reuters Trust Principles.

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