Despite Reeling in Nearly 60 New Clients, Silvergate Bank Loses 8% in Deposits
The cryptocurrency business in the United States does not have a lot of traditional financial institutions on their side yet, but Silvergate Bank is among the few. They have managed to add 59 new cryptocurrency clients in the fourth quarter last year. Unfortunately, financial reports show that the deposits from the industry went down by 8%.
The Securities and Exchange Commission (SEC) release an updated IPO prospectus from the company, dated December 31st. The prospectus shows that the bank had 542 total clients, spread amongst crypto exchanges, institutional investors in crypto, and others. The previous filing showed 483 crypto clients in September. Within the fourth quarter, the 59 clients included 2 exchanges, 24 investors, and 33 miscellaneous firms.
Though previous SEC filings by Silvergate had concealed the clients, this one did not, showing the names of several clients that the public did not know to be customers. Those clients included Genesis Trading, a market maker, Kenetic, an investment fund, and Polychain Capital, another investment fund. Previous reports have shown that the bank is involved with Xapo, Paxos, Circle, Gemini, bitFlyer, Kraken, Coinbase, Bitstamp, and Bittrex.
Despite adding new cryptocurrency companies, the amounts held in their Silvergate accounts went from $1.593 billion to $1.470 billion, which is down by $123 million. Deposits from the other groups grew from $4.8 million to $577.5 million in deposits from investors. The balances of startups grew from $46.4 million to $273.9 million.
Cryptocurrency-related businesses take on a major role in the Silvergate brand, considering that they account for 13.1% of the stock of the bank. The 10 largest clients account for 47.3% of the total stock, amounting to $843.6 million, and nine of the clients are cryptocurrencies. Furthermore, the 37 crypto exchanges involved with Silvergate cover 34.7% of the deposits submitted.
Throughout 2018, Silvergate said the deposits from digital currency clients went up by 11.4%, despite the fact that Bitcoin’s price tumbled by almost $10,000 in that time. That being said, it is clear that Silvergate didn’t hurt as much as other entities during this bear market for cryptocurrency.