Silvergate Crypto Bank Client Base Grew 37% in Last Year; SEN Transfer Volume Is Up 324%

  • Silvergate Bank published its quarterly earnings report on Wednesday, revealing that it's added 46 new cryptocurrency clients in the first quarter and, because of these clients, it also recorded a surge in its deposits and income fees.
  • Silvergate registered deposit levels from its digital clients primarily because of the uncertainty in the crypto market that followed the black Thursday crash.

Silvergate is among the few US-based banks that cater to crypto-traders among other crypto-related service providers. This situation provides them with a great source of revenue for the bank amid the growing interest of the public in the crypto space.

The bank went public on the New York Stock Exchange in November last year with $2.3 billion in total assets. The addition of 46 new crypto clients has taken the total number to 850. Out of these 850 crypto clients, 541 are institutional while remaining 249 are from different crypto backgrounds.

The bank seems to quite popular among the institutional given their high percentage among crypto clients, even the recent acquisition of 46 new clients, 32 of them were institutional investors. The bank also revealed that they have around 200 clients waiting to be approved as well.

Crypto Investors Biggest Depositors in the Bank

The quarterly report also revealed that deposits from the crypto clients make a significant portion of the total deposit. The first quarter saw an increase of 35% in deposit from these crypto clients taking the total amount of deposit to $1.7 billion out of the total $2 billion.

The figures are self-explanatory on the significance of crypto clients in the bank. While the deposit from these clients increases significantly, the other deposits took a massive dive of 45% in the first quarter.

Alan Lane, CEO of the bank revealed that the average balance of deposits was up by $100 million while it rose to $400 million for the period end deposits, mainly because institutional clients were putting more cash back into their accounts.

The bank also increased the cost of deposits from 0.84% in the last quarter of 2019 to 0.87% in the first quarter of 2020. The rise in deposit fee is significant if we compare it to the 0.08% charge in the first quarter of 2019.

The inflow of crypto clients and subsequent rise in deposit fees have made the bank an additional $300,000 from crypto clients alone. The bank’s net income rose by 22% to reach $4.4 million.

The Bank Doubles Number of Verified Transaction on its Silvergate Exchange Network (SEN)

The first quarter of 2020 saw bank’s Silvergate Exchange Network (SEN) handle a total of 31,405 transactions, more than double that of its last quarter of 14,400 and almost tripled from the number of transactions handled by SEN a year ago.

The trading volume also rose to $17.4 billion from last quarter’s $9.6 billion. The bank has since approved $12.5 million in bitcoin collateralized loan until now.

One of the key reasons behind its success with crypto clients is the ease of service, where it allows the customers to instantly move US Dollars between different exchanges and is also available during nights and weekends just like the crypto markets.

Looking at the success it has garnered from crypto clients, the bank is looking to launch several new features and products on SEN in the near future.

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