post-title Silvergate Bank Adds 48 Crypto Clients in Q4 Even as Deposits Slip 4%

Silvergate Bank Adds 48 Crypto Clients in Q4 Even as Deposits Slip 4%

Silvergate Bank Adds 48 Crypto Clients in Q4 Even as Deposits Slip 4%
Cryptocurrencies News ,

Silvergate Bank, one of the few U.S. banks openly serving crypto-related businesses, added more crypto clients in the fourth quarter of 2019 but saw deposits and fee income from those clients drop.

The La Jolla, Calif.-based bank, which went public on the New York Stock Exchange under the trading symbol SI in November, released its earnings report before the market open on Wednesday.

The report lists a 4 percent decrease in deposits from the crypto industry despite the addition of 48 crypto clients. The commercial bank’s overall deposits decreased by 1.8 percent in the same quarter (Silvergate also serves non-crypto businesses).

In a press release, CEO Alan Lane attributed these new clients to the growth of the Silvergate Exchange Network (SEN), which allows commercial customers to instantly move U.S. dollars between different crypto exchanges. SEN transactions topped 14,400 in the fourth quarter, a 17 percent increase from Q3 2019.

The cost of deposits for the bank, which holds $2.1 billion in assets, increased from 0.5 percent to 0.84 percent. The bank earned $1.4 million in fee income from its crypto customers, down 12.5 percent from $1.6 million last quarter.

The bank added 11 digital currency exchanges (including over-the-counter trading desks), 21 institutional investors and 16 crypto businesses (i.e. mining operations or crypto application companies). 

Silvergate’s net income decreased by around 45 percent, from $6.6 million in the third quarter to $3.6 million.

In 2013, Silvergate pivoted from traditional commercial banking to serving the cryptocurrency community as a rich resource of non-interest bearing deposits. The bank then converts these deposits into interest-bearing deposits at other banks, investment securities and loans. 

Earlier this month, Silvergate launched the SEN Leverage product, which allows proprietary traders to put up bitcoin as collateral for fiat loans that they can then use to buy more bitcoin, similar to margin lending in the traditional markets. 

Silvergate also made its first hire directly from the crypto industry, bringing on former Blockstream exec Benjamin Richman as director of digital currency.

This is a developing story and will be updated over the course of the day.

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About Juan Rodulfo

Defined by Nature: Planet Earth Habitant, Human, Son of Eladio Rodulfo & Briceida Moya, Brother of Gabriela, Gustavo & Katiuska, Father of Gabriel & Sofia; Defined by the Society: Venezuelan Citizen (Human Rights Limited by default), Friend of many, Enemy of few, Neighbor, Student/Teacher/Student, Worker/Supervisor/Manager/Leader/Worker, Husband of Katty/ Ex-Husband of K/Husband of Yohana; Defined by the US Immigration System: Legal Alien; Defined by the Gig Economy: Independent Contractor Form 1099; Studies in classroom: Master Degree in Human Resources Management, English, Chinese Mandarin; Studies at the real world: Human Behavior; Studies at home: Webmaster SEO, Graphic Web Apps Design, Internet & Social Media Marketing, Video Production, You Tube Branding, Trading, Import-Exports, Affiliate Marketing, Cooking, Laundry, Home Cleaning; Work experience: Public-Private-Entrepreneur Sectors; Other Definitions: Bitcoin Evangelist, Human Rights Peace and Love Advocate. Author of: Why Maslow: How to use his theory to stay in Power Forever (EN/SP); Asylum Seekers (EN/SP); Manual for Gorillas: 9 Rules to be the “Fer-pect” Dictator (EN/SP); Why you must Play the Lottery (EN/SP); Para Español Oprima #2: Speaking Spanish in Times of Xenophobia (EN/SP). Social Media profiles: Twitter/FB/Instagram/VK/Linkedin/Sina Weibo: @rodulfox
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