Shares of cryptocurrencies related companies fell in premarket trading on Monday after Silvergate Capital Corp pulled the plug on its payment network because of its doubts about keeping its business viable.
The digital assets-focused bank said late on Friday that it had made a risk-based decision to end Silvergate Exchange Network SEN Shares of the La Jolla, California-based bank, which was down more than 4% in premarket trading, while Signature Bank fell 3%. Coinbase Global and the BTC mining machine maker Ebang International were both down about 1% each.
The market for cryptocurrencies responded to the negative news from Silvergate Bank, with both Bitcoin and Ethereum down 4.8% for the week, analysts at the brokerage Bernstein said in an industry note.
A slew of criptocurrencies including Coinbase Global and Galaxy Digital have dropped Silvergate as their banking partner after the lender's latest filing raised questions about its ability to continue as a going concern.
The shares of Silvergate hit a new record low of $4.86 on Friday, shedding nearly 98% of their value since her record close in November 2021, wiping out more than $7 billion from the company's market capitalization.
The firm has struggled to stay afloat after the collapse of Sam Bankman- Fried's FTX in November caused investors to withdraw $8 billion in deposits from the bank in the last three months of the year.
Silvergate reported a net loss of $1 billion in the fourth quarter.