Amid the Great Liquidity Crisis, Silvergate Bank (NYSE: SI) decided to cease operations and go into liquidation. This is one of the first and largest high-profile explosions in traditional banking fueled by the crypto turmoil.
EOS parent company Block.One, backed by legendary investor Peter Thiel, has finally booked a massive $83 million stake in Silvergate Capital.
It stated that they decided to leave the position following the announcement of Silvergate’s liquidation. Block.One’s official announcement reads:
“While we are disappointed with this result, we remain steadfast that banks and other financial institutions, which span the digital asset and cryptocurrency sectors, are well positioned to deploy technology to digitalize the capabilities of both traditional financial services and the new burgeoning economy improve assets to better respond to the needs of the public”.
As of December 31, 2022, Block.one CEO Brendan Blumer and his company held a combined 9.9% stake in Silvergate Bank. According to SEC filings, it was worth approximately $95 million at the stock price at the time.
The CEO had already built up a huge $92 million equity position in November. Later, on December 31, he added a few more. Unfortunately, it was at this point that Silvergate Bank’s problems began to escalate.
On Thursday, March 9th, SI stock fell a massive 42% to close at $2.84. SI’s stock price has plummeted more than 83% year-to-date, resulting in massive asset erosion for Block.One
Silvergate is dragging down the crypto market
The shocks of the Silvergate collapse spread across the crypto industry. Bitcoin (BTC) is down 8.39% in the last 24 hours and is currently trading at $19,926 with a market cap of $384 billion.
Altcoins saw an even bigger correction as Ethereum (ETH) and others tumbled 7-10%. Aside from Silvergate Bank, the worrying macro trends and decline in Wall Street contributed to further selling pressure for Bitcoin and the crypto space. Also, according to the recent US budget, the Biden administration is cracking down on crypto investors.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.