Silvergate Capital Corp Reports $1B Loss in Q2 After $8B Withdrawals


• Silvergate Capital Corp reported a net loss of $1 billion in Q2 of 2022 due to investors withdrawing over $8 billion in deposits in the last three months of 2022.
• Silvergate Capital became a publicly traded company in 2019 and specialized in handling digital assets and enabling exchanges, institutions, and traders to exchange crypto for fiat currencies.
• In a preliminary earnings report, total deposits from digital asset customers dipped to $3.8 billion at the end of December last year, relative to the $11.9 billion reported at the end of September.

Silvergate Capital Corp, a publicly traded company since 2019, recently reported a net loss of $1 billion in Q2 of 2022. The company, which specializes in handling digital assets and enabling exchanges, institutions, and traders to exchange crypto for fiat currencies, has been impacted by the collapse of crypto exchange FTX.

Investors shaken by the collapse of the exchange withdrew over $8 billion in deposits in the last three months leading to December 2022, resulting in the $1 billion loss. In a preliminary earnings report released on January 5, 2023, Silvergate reported total deposits from digital asset customers dipping to $3.8 billion at the end of December last year, relative to the $11.9 billion reported at the end of September.

To maintain liquidity, Silvergate sold $5.2 billion of debt securities at a loss of $718 million in Q4. Despite the losses, the company’s shares were up by almost 4% in pre-market trading.

The collapse of FTX has had a significant impact on the digital asset sector, with Silvergate’s earnings report indicating the extent of the damage. The company is now faced with the challenge of rebuilding its customer base and restoring the confidence of investors, a task that will not be easy.

Silvergate’s losses are a stark reminder of the risks associated with investing in digital assets, and the importance of diversifying portfolios and exercising due diligence before investing. The company’s future remains uncertain, but with its shares up in pre-market trading, Silvergate could be on the path to recovery.