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Capital’s Silvergate

Silvergate Capital’s Q4 Earnings Showcase Growth in Cryptocurrency Engagement

Silvergate Bank has produced strong growth and earnings since going public in late 2019. However, the fourth-quarter earnings of 2021 failed to maintain the trend as net income slumped by almost 9%. On the other hand, fee and net interest incomes powered by digital currencies reflected growth.

Silvergate’s Q4 Earnings

The cryptocurrency-friendly bank reported a net income of $21.4 million for the fourth quarter, compared to $23.5 million for Q3 2021. It was still considerably larger than the $9.1 million for the fourth quarter of 2020.

The announcement also revealed that customer fees income related to digital currency rose to $9.3 million Q4  from $8.1 million in Q3, meaning an increase of almost 15%. The figures have nearly doubled since Q4 2020, when the digital currency customer-related fee income was reported to be $3.8 million.

Zooming out, the income by 2021’s end was $35.8 million, compared to $11.1 million by 2020-end. Additionally, Silvergate observed the expansion of digital currency customers throughout the year. In fact, the clients grew to 1,381 at the end of 2021, compared to 1,305 three months back. On the other hand, digital currency customers stood at 969 a year ago.

In tandem with users, digital currency deposits also amplified in Q4. The average transfer amounts increased by over 18%, from $11.2 billion to $13.3 billion.

Meanwhile, the California state-chartered bank, fiat on-ramp for Bitcoin – Silvergate Exchange Network (SEN) – reportedly handled transfers worth $219.2 billion, as opposed to $162 billion last quarter.

During the third-quarter earnings call, SIlvergate’s management had confirmed that volume on SEN is massively correlated to the spot trading volume of both Bitcoin and Ethereum. The last three months of 2021 saw significant volatility, and the trading volume slumped. Despite this, SEN managed to process higher transfers than third-quarter volume.

Silvergate’s Recent Endeavors

CryptoPotato earlier reported that Silvergate was looking to raise $461.3 million via the sale of 3.31 million of common stock, according to a filing with the US Securities and Exchange Commission (SEC). Silvergate Bank, along with a US Federal Reserve member, was reportedly working together with Bitso to enable USD transactions for El Salvador’s Chivo wallet.

In November last year, Silvergate also partnered with CryptoCom to facilitate USD deposits and withdrawals to the bank’s institutional consumer base.


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