Silvergate Worst Performing Crypto Stock YTD

One month into 2023, its share price has continued its stiff downtrend in the face of skepticism stemming from poor quarterly earnings

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Silvergate modified by Blockworks

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Silvergate shares sprung to life Monday after BlackRock, the world’s largest asset manager, reported an increased stake in the crypto bank.

BlackRock bumped its Silvergate stake to 7.2%, but that has done little to correct the course for this year’s worst-performing crypto stock.

In year-to-date terms, Silvergate is down 18% to around $14.25 per share while all other crypto-related equities have seen their prices soar, with stocks in certain sectors more than doubling in value. 

Of the 49 crypto stocks Blockworks reviewed, Silvergate remains the only outlier across an otherwise lucrative bet on a number of the industry’s sectors, including mining, this year.

Repeated attempts to reclaim positive gains, including a 20% surge in its stock in mid-January, have made little impact on its 94% tumble from all-time highs of $239 per share, seen Nov. 21, 2021.

By comparison, publicly-listed rival Signature Bank, which recently announced it would only handle crypto transactions above $100,000 for its customers via SWIFT, is up nearly 14% over the same period, NASDAQ data show.

Silvergate’s total digital asset customer deposits declined from $11.9 billion at the end of the third quarter to $3.8 billion by the end of last year. 

Spooked market participants rushed to withdraw more than $8 billion in digital assets from the bank following concerns over its ability to continue operating business as usual.

In a bid to fulfill those withdrawals and generate liquidity, the bank had to sell assets at an inopportune time, it said in a fourth-quarter earnings report. As a result, the bank booked a $1 billion loss.

The impact on its business has been attributed to concerns over the bank’s exposure to bankrupt FTX, which it serviced right up until the exchange’s collapse in November, as well as widespread fear over market contagion.

Last month, Silvergate also announced a 40% cut to its staff in an attempt to further reduce its expenditures.

Silvergate did not immediately respond to a request for comment.


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