Signature Bank’s Stock Falls as Silvergate Announces Halt in Operations
On Thursday, Signature Bank’s stock fell after its major competitor, Silvergate, announced it was planning to halt operations. The stock dropped by about 9% to $92.41 per share, its lowest price in more than two years. Meanwhile, Silvergate stock plunged 20% to $3.87.
The holding company for Silvergate Bank, Silvergate Capital Corporation, stated in an announcement that it would voluntarily liquidate due to the current regulatory developments and ongoing crypto winter.
The bank has promised to repay bank deposits to clients in full. The crypto-friendly bank’s announcement comes a few days after it suspended its Silvergate Exchange Network, a platform that facilitated crypto transactions for its customers.
Over the past week, several crypto companies have ended their association with Silvergate. They include stablecoin issuer Paxos, crypto exchange Kraken, and blockchain analytics firm Chainalysis.
The news of Silvergate’s liquidation has sent shockwaves through the crypto industry, with many speculating about the reasons behind the bank’s decision. Some have suggested that the bank’s heavy reliance on crypto-related businesses may have made it vulnerable to regulatory crackdowns.
Others have pointed to the ongoing bear market in the crypto industry, which has seen the value of many cryptocurrencies plummet over the past year. Silvergate’s decision to halt operations may be a sign that the crypto winter is far from over.
For Signature Bank, the news of Silvergate’s liquidation is a blow to its plans to expand its crypto-related business. The bank has been one of the few traditional banks to embrace the crypto industry, and its stock has benefited from the growing interest in cryptocurrencies.
However, with Silvergate out of the picture, Signature Bank may face increased competition from other banks looking to enter the crypto space. The bank will need to find new ways to differentiate itself and attract customers in a rapidly changing industry.
