Silvergate Capital Corporation's Days...Are Not Numbered

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Jamie Dimon Chairman, CEO and President of JP Morgan Chase once called Bitcoin a fraud, even threatening to fire staff who had any Bitcoin. Ordinary banks even went as far as closing accounts of people who have affiliation with cryptos. People who made a killing on Bitcoin and want to use those profits to buy a home couldn’t…once upon a time. A lot of it has to do with ordinary banks and governments thinking Bitcoin and cryptos are for laundering money. No sweat because there is one company that went public late last year to fill the void. The company I’m referring to is Silvergate Capital.

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Silvergate Capital Corporation operates as a bank holding company for Silvergate Bank that provides banking products and services to business and individual clients in the United States and internationally. It offers deposit products, including interest and noninterest bearing demand accounts, money market and savings accounts, and certificates of deposit accounts.

But Silvergate isn’t just another ordinary bank. Well, they were an ordinary bank that was founded in 1988, but now focus solely on the crypto industry now. They even have and digital exchange network that connects crypto exchanges and investors as well as enables transactions of U.S. dollars between SEN members.

Silvergate once had a leading position with significant first-mover advantages, and a unique service proposition that gives it a low cost deposit base and relationship monetization potential, but that’s not the case any longer.

CoinDesk Research presents an in-depth look into San Diego-based Silvergate Bank, a leading bank serving the cryptocurrency industry. With over 880 digital asset clients with an aggregate balance of $1.5 billion in deposits, Silvergate is one of the market leaders within this niche market.

The total number of customers continues to increase, management notes the bank has experienced deposit outflows to competitors offering yield on deposits, unlike Silvergate whose deposit base is almost exclusively non-interest bearing.

As the space matures, it’s likely more banks will feel compelled to service the crypto market, just as JPMorgan recently announced its acceptance of Coinbase and Gemini as its first digital asset customers.

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JP Morgan better start recognizing or get left behind. With regards to Silvergate, I don’t think they will go out of business, but I do anticipate one of the traditional banks potentially buying them out.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

Posted Using LeoFinance Beta



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