Silvergate Capital Corp's stock fell in premarket trading today after Silvergate pulled the plug on its cryptocurrency payments network, following its concerns about keeping its business viable.
The Digital Assets-focused bank said late on Friday that effective immediately it had made a risk-based decision to discontinue Silvergate Exchange Network SEN Shares of La Jolla, California-based bank, which was down more than 4% in premarket trading, while Crypto lending peer Signature Bank fell 3%. Crypto exchange Coinbase Global and BTC mining machine maker Ebang International were both down about 1%.
The crypto market responded to Silvergate Bank's negative news, with Bitcoin and Ethereum down 4.8% for the week, analysts at brokerage Bernstein said in an industry note.
A number of crypto heavyweights, such as Coinbase Global and Galaxy Digital, have dropped Silvergate as their banking partner since the lender's latest filing raised questions about its ability to continue as a going concern.
Silvergate shares fell on Friday at a record low of $4.86, dipping nearly 98% of their value since their record close in November 2021 and reducing the company's market value to $7.2 billion.
In November, the failure of Sam Bankman-Fried's crypto exchange, FTX, forced investors to pull out $85 billion in deposits from the bank in the last three months of the year.
Silvergate's fourth quarter resulted in a net loss of $1 billion.