Silvergate Capital Corporation (NYSE:SI) has seen its market valuation plummet as it now trades at bankruptcy levels.
At market close today, Silvergate shares traded at $2.84, having lost over 42% of its value during the day.
The cratering of value followed the news yesterday that Silvergate was winding down its banking operations as it decided this was the best path for the bank going forward. All deposits will be redeemable.
Once a top crypto bank, providing banking services for digital asset firms where other banks feared to operate, crypto contagion and the failure of multiple crypto firms harmed its niche operations of serving these platforms. Much of the deposits held at the bank have now fled to other platforms. Silvergate recently held around $1.4 billion in cash yet reported over $13 billion in deposits. At a different time, Silvergate may have been fine, but most of the assets were held in bonds that had declined in value due to the rapidly rising interest rate environment.
To put the collapse into perspective, Silvergate’s 52-week high is reported at over $162 a share. The value destruction is in the billions of dollars.
