Silvergate Capital Incurs A Massive $1 Billion Loss Last Quarter, Blames Market Conditions
Silvergate Capital, a bank that supports digital assets and is well-known for working with crypto companies, has reported staggering losses for the final three months of 2022. The company, which went public in 2019, is well-known for managing digital assets and aiding the conversion of cryptocurrencies into fiat currency for traders, exchanges, and institutions.
A Deeper Analysis Of Silvergate’s Report
“We compared our income from 2021 and 2022. Firstly, we had a total income of 40.6 million USD, or 1.28 USD for each diluted share, in Q3 of 2022. Secondly, an $18.4 million total income, or $0.66 for each diluted in Q4 2021. We discovered that the total loss attributed to shareholders for Q4 in 2022 was $1.0 billion, or $33.16 loss for each common share.”
The bank claims in its latest earnings report that it recorded losses amounting to $1 billion during the final three months of 2022. The net loss was, however, mildly more controllable than for the entire year of 2022, per the Silvergate report.
“Compared to $75.5 million net profit or $2.91 for each diluted share, for the fiscal year 2021, the net loss applicable to shareholders for the fiscal year 2022 was 948.7 million dollars, or $30.07 net loss for every common share.”
Despite the significant losses in quarter four, there was a slight increase in transactions on the bank’s network during the same timeframe. $117.1 billion worth of transfers were handled by the SEN (Silvergate Exchange Network) in last year’s Q4 — a rise of 4% in contrast to $112.6 billion in Q3 of 2022.
However, it is a decrease of 47% in comparison to the $219.2 billion the company earned in quarter 4 of 2021.
Making Quick Decisions Amidst Market Conditions
Alan Lane, CEO of Silvergate Capital, says, “Our aim has stayed the same amid making quick decisions to handle the present scenario. We remain committed and continue to offer value-added solutions to our major institutional customers due to our faith in the future of the digital asset market. Consequently, we are dedicated to upholding a highly liquid financial position.”
Silvergate reiterated Lane’s assertions and revealed to The Wall Street Journal in January 2022 that it is still confident in cryptocurrencies despite the challenging market conditions. “Silvergate’s objective has always stayed the same while taking active steps to manage the current situation.”
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