- Silvergate’s shares dropped by over 20% due to missed earnings and delays in stablecoin projects.
- Digital asset customers grew, but their average deposits fell, according to Silvergate.
- CEO Lane expressed his optimism about the future and hopes to see a rise soon.
Silvergate Capital (NYSE:SI) reports a fall in share after a decline in its earnings and delay in developing a much-anticipated stablecoin. Reports say that its shares fell by more than 20%.
According to Bloomberg data, the bank reported a loss per share of $1.28 during the quarter, a decrease from the average analyst estimate of $1.41. The bank also announced that the rollout of its stablecoin, developed with technology acquired from the failed Meta Platforms Inc. backed Diem project, would be delayed for an unknown time. The rollout was expected to take place by the end of this year.
President and Chief Executive Officer (CEO) Alan Lane of Silvergate said during an earnings call that the company is working with regulators and policymakers to ensure compliance with the stablecoin.
In the earnings conference call, Lane said:
We still feel very strongly that we are in the best position of any other bank out there to launch a regulatory compliant, safe and sound, tokenized dollar on the blockchain.
Recently, Earrings Per Share (EPS) estimates for the bank were cut by analysts at Wedbush due to lower average earning assets growth assumptions and the delayed launch of stablecoins. Nonetheless, Silvergate is “well positioned to thrive” if the crypto market recovers and revenue will ramp up following the launch of the stablecoin in 2023, as they now expect.
During the quarter, Silvergate Exchange Network, the firm’s key growth driver, reported a decrease in usage. Crypto firms and investors used the payments platform to send $112.6 billion US dollar transfers in the third quarter, a decline of 41% from the prior quarter.
As of September 30, Silvergate had 1,677 digital asset customers. However, average digital asset deposits with customers fell to $12 billion from $13.8 billion in the previous quarter.
Over the past few months, the crypto market has been caught in a severe crypto winter, where almost all currencies saw massive losses, resulting in a market fall of over 60%, contributing to the bank’s fall as well.
The post Silvergate Reports a Fall After Its Delayed Stable Coin Project appeared first on Coin Edition.