An enterprise deemed as the “Bitcoin Bank” is claiming that its year 2018 was extremely successful, despite a market downturn that saw the value of BTC fall from the $20,000 range to nearly $3,200 at the end of the year. As it turns out, the market collapse did not discourage Silvergate from achieving its objectives.
Despite the hostile market, Silvergate Bank, self-appointed as the “leading provider of innovative financial infrastructure solutions and services to participants in the digital currency industry,” disclosed a document filed with the United States’ SEC (Security Exchange Commission) this week explaining that there was an increase in the number of crypto industry customers last year.
From 244 to 542 Clients
Near the end of 2018, Silvergate disclosed that it had engaged 542 crypto-related clients, which represents a sizable increase considering the 2017 number, which was 244. The surge was of exactly 122.1 % from year to year, an amazing figure considering the harsh conditions.
Silverage also reported that the total deposits also went substantially up, by approximately 8%, from 2017 to 2018: from $1.46 billion to $1.58 billion. The project also stated that it was about to onboard 232 new clients, as well.
Most of Silvergate’s clientele is comprised of bitcoin exchanges and institutional investors. The first group accounted for $618.5 million in deposits at the outset of 2018, whilst the second group contributed about $577.5 to the grand total. Circle, Bitstamp, and Genesis are some of the crypto projects that are regular customers of Silvergate.
Other Partners and Associates
The company has other partners, as well, including asset proprietary trading and investment project Polychain Capital, bitcoin storage business Xapo, from Hong Kong, and Paxos, the entity behind PAX, a well-known stablecoin in the crypto landscape.
Silvergate is one of the few financial institutes that has welcomed crypto projects. According to a Bloomberg report, some of them are Bank Frick (based in Europe,) and Signature bank, from the United States of America. Silvergate is from the latter country, most precisely from the city of San Diego, California State.
Silvergate states that the “addressable market” for USD deposits related to crypto assets is between $30 and $40 billion, which provides hope for future growth within the market”, according to the company itself.
Potential Risks
However, the company has warned potential investors about the possible risks of the crypto sector: “Our business is subject to many substantial risks and uncertainties you should consider before deciding to invest in our common stock … including risks that that the digital currency industry may not gain widespread adoption, that legal and regulatory uncertainty regarding the regulation of digital currencies and digital currency activities may inhibit the growth of the digital currency industry, that our low-cost funding strategy may not be sustainable, that our deposits may be adversely affected by price volatility.”
Silvergate Capital, which functions as Silvergate Bank’s parent firm, has already begun to prepare for an Initial Public Offering, as of November 2018, to provide funding for organic growth.
By Andres Chavez
