You may have noticed that BlockFi filed for bankruptcy yesterday. Immediately afterwards, the rumor came out through Swiss investor Walter Bloomberg that Silvergate Capital would have lent money to BlockFi. Silvergate itself indicates that it is less than 20 million dollars.
No risk of infection
In that respect, it seems that there is no risk of contamination with regard to BlockFi and Silvergate. That’s good for the industry, as Silvergate has approximately $13.2 billion in assets under management. Silvergate further adds that BlockFi was not a custodian for its Bitcoin-backed loans and that it had no investments in the crypto lending platform.
“As the digital asset industry continues to evolve, I want to reiterate that Silvergate’s platform is built to manage stress and volatility,” said CEO Alan Lane. This puts an end to a mountain of negative reporting about the bank.
Especially on Twitter, there were a lot of people trying to put Silvergate in a bad light. Take Wall Street Silver, for example, who shared the post above. If that happens often enough, it can of course cause a kind of digital bank run.
Share down sharply
By the way, Silvergate’s stock had a pretty rough day yesterday. It eventually fell by 11.1 percent to end the day at $24.45. From the beginning of the year, the neobank has lost 83.6 percent of its price value. This makes Silvergate even heavier than Bitcoin itself.
It is notable that Block.one CEO Brendan Blumer bought a share in Silvergate Capital earlier in November. Block.one is the company behind the CEO of EOS, raising more than $4 billion in total. There is little left of that, because even after a few years EOS only has a market cap of about 1 billion dollars.
