In a shocking turn of events, cryptocurrency exchange Coinbase has cut ties with Silvergate, a crypto-focused lender headquartered in California. This decision comes amid a crisis for Silvergate, which has seen its shares plummet to a record low of $6.80, and is assessing whether it can continue to function.
The move by Coinbase has sent shockwaves throughout the crypto market, with the exchange’s shares falling nearly 10% to $58.04. The situation has raised concerns about the stability of the entire crypto market, as Silvergate’s troubles may have far-reaching implications.
Coinbase isn’t the only firm to sever ties with Silvergate, as crypto financial services company Galaxy Digital has also stopped accepting or initiating payments to or from the lender. Both companies cited “recent developments” as the reason for their actions.
Silvergate has been hit hard by the collapse of major crypto exchange FTX, which has triggered a bank run on the lender. The company has postponed its annual report and is assessing whether it can continue to operate.
The lender’s troubles have not gone unnoticed by investors, with premarket trading on Thursday seeing an almost 50% drop in Silvergate’s stock. The company, which had been known for its crypto-friendly policies, now finds itself in dire straits.
The situation is a stark reminder of the risks associated with the crypto market, which is still in its early stages and subject to volatility. While the potential rewards of investing in crypto can be significant, so too can the risks, as Silvergate’s troubles demonstrate.
As the crypto market continues to evolve, it remains to be seen how Silvergate’s situation will impact other players in the industry. For now, though, investors will be keeping a close eye on developments and hoping for a resolution to this crisis.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
