Crypto Slides Below $1 Trillion As Silicon Valley Bank And Silvergate Shutter

SILVERGATE THROWS IN THE TOWEL

Losses followed the decision of crypto-focused bank Silvergate Capital to close up shop on Wednesday after depositors and customers fled the company.

Last week, the bank closed its Silvergate Exchange Network, a key element in its attempt to provide a bridge between traditional banking services and the digital-assets industry. Without what Moody’s Investors Service has called its “core franchise” and following an exodus of large customers, it was unclear what market the Silvergate Bank operation would be able to serve.

Unlike the bankruptcies that roiled the crypto industry last year, Silvergate is planning to liquidate its business in what it called “an orderly manner” according to a news release on its website. The stock, which is still trading, fell to $2.41 Friday afternoon, 51% below its Wednesday close.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:30 p.m. on March 10, 2023.

SILICON VALLEY BANK SHUT BY CALIFORNIA REGULATOR

On Friday, Silicon Valley Bank’s rich 40-year history came to an abrupt, ignominious end as regulators closed the bank and appointed the Federal Deposit Insurance its receiver.

For the startups and investors that SVB has financed and served as a bank–spanning the entire venture capital-backed ecosystem–that raises questions about when deposits will be returned, if at all.

The most pressing issue: Startups making payroll next week. Some firms that banked with SVB will need to pay employees as soon as Tuesday.Read more

OUTLOOK FOR GRAYSCALE COURT VICTORY IMPROVES

Grayscale Bitcoin Trust’s discount narrowed from 42% at the start of the week to roughly 35% following the asset manager’s oral arguments in its court case against the Securities and Exchange Commission.

CEO Michael Sonnenshein told Forbes his team “felt encouraged” after judges expressed skepticism about SEC arguments made in defense of its decision to reject Grayscale’s application to convert the investment vehicle to an exchange-traded fund in June—particularly why the agency deemed bitcoin futures prices more resistant to manipulation than the spot market, upon which the ETF would be based. Some analysts have raised Grayscale’s victory odds.

Read more

ELSEWHERE

U.S. Government Appeals Approval Of Voyager Sale To Binance.US [Reuters]

Signature Bank, Stablecoins Might Benefit From Silvergate Exchange Network's Demise [CoinDesk]

Blur Captures 84% Of ETH-based NFT Transactions In First Week Of March [The Block]

Nina Bambysheva
Reporter
Forbes Money & Markets

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

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