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Silvergate Stock Price Has Nosedived as Bankruptcy Fears Rise
Silvergate stock price has been in a steady downward trend as its exposure to the crypto industry has worsened. The shares tumbled by more than 40% on Thursday as it published its interim results and laid off employees. It plummeted to a record low of $12.10, which was about 95% from its all-time high.
Crypto bank is collapsing
Silvergate Capital has had a remarkable fall from grace. The company, which was previously a small community bank, gained popularity when it embraced cryptocurrencies. It shifted its busines model to focus more on crypto companies and other players in the industry.
Silvergate provides its solutions across two business segments: Digital Currency and Commercial Banking. The former provides solutions like Silvergate Exchange Network, SEN Leverage, and institutional custody. On the other hand, the former business provides traditional business banking solutions.
Silvergate stock price has been in a strong bearish trend in the past few months because of the collapse of cryptocurrencies. Bitcoin moved from an all-time high of near $70,000 to about $16,000. Similarly, other coins lost over 60% of their total value. Silvergate, like Coinbase, has a close correlation to crypto prices.
Silvergate Capital’s challenges worsened when FTX and Alameda Research collapsed. The two companies were some of its biggest clients. As such, as existential risks rose, the company saw significant outflows. Its total customer deposits dropped to $3.8 billion on December 31 from $11.9 billion in September.
Silvergate decided to cut about 200 jobs in a bid to conserve cash. It said that it was still a financially sound bank with ovr $3.8 billion in deposits and $5.6 billion of government and agency-backed debt. It hopes to sell some of the debt. Some analysts believe that Silvergate could have a complete collapse if cryptocurrencies experience the same headwinds it had in 2022.
Silvergate stock price forecast
The daily chart shows that the Silvergate share price has been in a strong sell-off for months. It managed to move below the important support level at $51.87, the lowest level on July 5. It has moved below all moving averages. Therefore, the outlook of the stock is still weak considering that the Fed pointed that it will continue hiking rates in 2023.
Bitcoin price has been hovering above its highest level since June 2022 over the past few hours. The largest cryptocurrency by market cap has jumped by 28.30% in the past week, while its year-to-date price inches higher to 70.63%. Bitcoin’s total market cap has increased by 4.77% over the last 24 hours to $547.7 billion, while the total volume of the coin traded rose by 50%.
BTC Skyrockets
Bitcoin price was rallying on Monday as most altcoins slumped, led by the largest altcoin by market cap, Ethereum. The global crypto market cap has increased 2.49% over the last day to $1.18 trillion, while the total crypto market volume jumped 34.88%. Bitcoin’s dominance inched 0.98% over the past 24 hours to 46.34%, its highest level since June 2022.
The recent global banking crisis in which three major banks in the US were closed within days has pushed the BTC price higher. Silvergate Capital, Signature Bank, and Silicon Valley Bank recently disclosed operational difficulties, prompting regulators to shut them down.
Switzerland’s largest banking institution, UBS, announced on Sunday that it had entered a merger deal with its embattled rival Credit Suisse. UBS announced that it would buy its rival for $3.25 billion, with Swiss regulators playing a key role in the ideal. According to the Swiss National Bank, the merger will secure financial stability and protect the Swiss economy.
Bitcoin reacted positively to the news, cruising…
Solana price joined in on the recent rally in the global cryptocurrency market, jumping nearly 17% in the past week. Solana has made substantial gains this year, climbing 102% in its year-to-date price. SOL ranks as the 11th largest cryptocurrency after Binance USD and ahead of Polkadot. Despite the altcoin’s recent rally, the total volume of the coin traded has continued to dwindle.
Fundamentals
Solana price was trading slightly higher on Friday as Bitcoin and other altcoins extended their rally despite the bank contagion fears weighing on the markets. Bitcoin and Ethereum have been leading the recent rally in the market, jumping more than 30% and 20% in the past week, respectively.
Investors have welcomed the resilient crypto prices amid the recent crisis in the banking sector this week. The week started with the collapse of Signature Bank and Silicon Valley Bank on Sunday until the focus shifted to Credit Suisse and First Republic Bank. Traders have been digesting the fate of Credit Suisse even after the bank said that it would borrow up to 50 billion Swiss Francs from the Swiss National Bank.
Several analysts have linked the recent rally in the crypto market to lingering bank worries. Even so, crypto prices are heavily influenced by inflation and the Federal Reserve interest rate hikes. According to analysts, the recent decline in banking stocks points to the vulnerability of traditional institutions, raising liquidity concerns…
Bitcoin price has been on a 4-day consecutive rally, jumping more than 29% since Friday when Silicon Valley Bank collapsed. Despite the tough year so far, BTC has been among the best-performing cryptocurrencies, jumping 57% in the year to date. At the time of writing, Bitcoin was trading 7% higher at $25,820.
BTC is Outperforming
Bitcoin price has been rallying in its recent trading sessions despite the collapse of the Silicon Valley Bank last week on Friday. The coin’s recent rally has been largely boosted by the current bullish momentum in the markets. Bitcoin’s coin market cap has increased by more than 7% in the past 24 hours, while the total volume of the coin traded slipped 8%.
Data by Coinmarketcap shows that the global crypto market cap has increased further by 5.19% to $1.13 trillion, while the total crypto market volume has decreased by 15.96% over the same period. Bitcoin’s dominance has increased by 0.83% over the last day to 44.24%.
The rally in the crypto market has been intricately linked to the recent US Consumer Price Index (CPI) data. The Bureau of Labor Statistics (BLS) reported a 0.4% increase in inflation in February from January, matching consensus estimates by analysts.
The CPI reading declined to 6% year on year, down from 6.4% in January, in line with market expectations. The core CPI, which excludes volatile food and energy prices, came in at…
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