With all that has been going on in the crypto industry, especially with the recent FTX liquidity crunch, Silvergate Bank Chief Executive Officer (CEO) Alan Lane is of the opinion that Bitcoin (BTC) is distinct from other cryptocurrencies.
During the Oppenheimer Blockchain & Digital Assets Summit, he pulled out a breakdown of volumes of the Silvergate Exchange Network (SEN) as evidence to emphasize and prove his point.
“I do think that bitcoin is separate from everything and that’s evident by how well the price has held up and by the fact that we still have an active performing SEN leverage book where we’re lending against bitcoin,” Lane said.
The FTX implosion and bankruptcy filing have caused several markets to experience a downtrend.
While some are still trying to regain balance and stability, Silvergate, which has been embossed to withstand such volatility, is catering to customers’ needs by making sure that they have access to United States dollar transfers 24 hours every day. Lane analyzed that Silvergate’s strong capital reserves and over-collateralized loan balance have equipped the firm for the coming market storm.
Further emphasizing the current status of Silvergate, Lane added “whether deposits are up or down, we have the liquidity and the capital ratios to support the volatility.”
So far Silvergate claims to have limited exposure to the bankrupt cryptocurrency exchange FTX, no outstanding loan nor deposits on the exchange which amounts to 10% or less of $11.9 billion in customers’ crypto deposits.
Silvergate Has no Exposure to FTX
The firm’s shares only plummeted 12% in connection to the FTX collapse. Apart from that below 10% deposit of $11.9 billion in customers’ crypto funds, Silvergate has no other relationship with FTX.
Not deterred by the present condition of the market, Lane says “there are always buyers, especially with bitcoin,” he added, “we’ll get through this as we have prior cycles and continue to serve the industry.”
Comparing the instability and collapse of FTX due to the sales of a token (FTT) which according to Lane ‘does not stand any value’, the CEO clarified that Silvergate does not engage in such business, “That is not what Silvergate does. We move U.S. dollars,” he said.
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