Silvergate, one of the most important banks serving crypto firms in the US, has officially declared bankruptcy after the collapse sparked by FTX depleted its financial strength. Industry experts predict the chain of bankruptcy will extend to banking services such as Silicon Valley Bank.
Silvergate collapsed, which crypto company is next?
US crypto banking service Silvergate has become the latest victim of the epidemic that rocked the crypto markets after the collapse of FTX. Alarm bells began to ring for investors after the company announced more than $1 billion in losses and $8 billion in deposit slips. cryptocoin.com In this article, we have included the destruction caused by the news of bankruptcy.
According to the latest reports, the company is seeking consultants to seek out potential buyers after all attempts to raise capital have failed. Silicon Valley Bank (SVB), one of the banks operating in the same field as Silvergate, seems to be on the verge of a similar situation.
Worries triggered bank run event
Rising interest rates, recession concerns, bankruptcy crises and regulatory pressure in the US have led to massive capital outflows from the cryptocurrency market. As a result, there is a significant increase in requests for withdrawals from bank deposits at institutions such as the SVB.
According to details of documents released Wednesday, the SVB planned to sell a total of $1.25 billion of common stock and an additional $500 million of convertible preferred shares. According to a regulatory filing, SVB also announced that it has reached an agreement with investment firm General Atlantic to sell $500 million worth of common stock. However, the completion of this deal was dependent on the successful completion of the other stock offering.
Shares of Silicon Valley Bank (SIVB) fell 60% the next day after the firm announced its intentions to raise more than $2 billion on Wednesday evening. The share price fell another 60% in premarket trading on Friday. As of now, trading of SIVB shares has been suspended due to increased volatility.
Which companies might be in danger after the SVB?
Following in the footsteps of Silvergate and Silicon Valley Bank, market participants and experts predict a similar fate for First Republic Bank, which is being watched closely by US officials amid growing concerns about falling deposits. Headquartered in San Francisco, First Republic serves affluent individuals and business owners. These are customers who withdraw money from their bank accounts to look for Treasury and other products with higher interest rates.
First Republic deposits increased 13% in 2022 compared to the previous year; however, the lender had to pay more for these deposits, which affected the firm’s profitability statistics. In a move reminiscent of the SVB, the bank recently announced that it will seek new funding after the sale of a significant portion of its securities portfolio. First Republic (FRC) shares fell more than 50% after markets opened today and have since stopped trading further.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.