Bitcoin Will Always Have Buyers, Says Silvergate CEO

Bitcoin’s highest trading price was around $70K, recorded in 2021.
Silvergate’s margin profit decreased by 4 percent in Q3 of 2023.

The Chief Executive Officer of Silvergate, Alan Lane, believes that Bitcoin is one of the best-performing players in the crypto market even after cryptowinters.

Lane pointed out the declining volume on the Silvergate Exchange Network (SEN) as evidence.

In the mid-quarter update, Lane noted, “I think that bitcoin is separate from everything, and that’s evident by how well the price has held up and by the fact that we still have an active performing SEN leverage book where we’re lending against bitcoin.”

The past few months have been the worst for the crypto market, and the crash of FTX is troubling the crypto market more than ever.

Lane also noted, “whether deposits are up or down, we have the liquidity and the capital ratios to support the volatility.”

The San Diego based bank assured limited exposure to FTX in addition to negligible outstanding debt and accounted for less than 10% of the $11.9 billion worth customer digital asset deposits held on the exchange. Despite the claims, the stock price tumbled up to 22%, since the FTX collapse, with this predicted amount of debt.

Regardless of the crypto market volatility, Lane is confident and stated that there are always buyers, especially with bitcoin,” adding, “we’ll get through this as we have prior cycles and continue to serve the industry.”

In the context of market-transition risks associated with FTX, Lane quoted that leveraging a token that did not have any value” was the major origin of instability — clearly about FTT the native token of FTX “That is not what Silvergate does. We move U.S. dollars,” Lane said.

Alan added, “We don’t lend against any of these other tokens, and so we feel very good about that portfolio.” he highlighted the third quarter’s $ 300 million in outstanding bitcoin-collateralized loans were backed by approximately $770 million in bitcoin, helping the company to survive and grow positively.”

While no further SEN listings were announced, Alan describes that the SEN foundation supports new markets based on the ability to efficiently exchange and manage with correspondent banks and foreign exchange trading partners.

Silvergate Stock Price

After the FTX crash, it has been observed that the stock prices of Silvergate decreased by 23%, at the press time,the Silvergate stock is trading at $27.90.

If we compare the income statement of Silvergate in Q2 and Q3 of 2022, a severe impact is seen on the company’s net margin.

In Q2, Silvergate’s revenue was around $ 80.80M, from which net income was $38.60M, and Profit margin was around $47.78%.

According to Q3 reports of Silvergate, published in September 2022, the company’s profit margin decreased in the third quarter of 2022. The profit margin of Silvergate stock decreased by approximately 4 percent compared to Q2 reports.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing