Bitcoin and ether slide as industry woes spark liquidation of crypto bank Silvergate

  • Bitcoin and other crypto assets fell Thursday following a decision by Silvergate Bank to liquidate.
  • Bitcoin fell by more than 2% as Silvergate shares plunged by more than 40% at intraday lows.
  • Coinbase, Signature Bank, and Metropolitan Bank Co. shares were also lower.

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Bitcoin fell alongside other crypto assets Thursday as Silvergate Capital shares plunged with the company’s decision to shut the doors on its crypto-friendly bank.

Bitcoin declined 2.7% to $21,484.95, and ether lost 1.8% to $1,527.75 as investors assessed the pending demise of one of the few US banks that took in crypto deposits.

Silvergate Capital shares dropped as much as 42% then pared the loss to 21%. The company said Wednesday an “orderly wind down” and a voluntary liquidation of its Silvergate Bank was the best path forward in light of industry and regulatory developments. Silvergate recently closed its payments network, Silvergate Exchange Network.

Shares of other crypto-linked banks fell. Signature Bank lost 8.6% and Metropolitan Bank Holding moved 5.6% lower. Metropolitan Bank in January said it would exit its services related to crypto assets following a review of developments in the industry. Signature Bank has been reducing its deposits related to cryptocurrencies.

“As a reminder, Signature Bank does not invest in, does not trade, does not hold, does not custody and does not lend against or make loans collateralized by digital assets,” the bank’s CEO and co-founder Joseph J. DePaolo said in a Thursday statement.

Crypto players such as Coinbase, Circle, and Galaxy Digital severed ties with Silvergate after it alerted investors last week to its troubles. Coinbase shares were down 8% on Thursday and Galaxy Digital Holdings fell 4% in over-the-counter trading.

Silvergate Capital said it plans to repay all deposits.


Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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