Silvergate’s Crypto-Cred Hits the Wall
It seems that the crypto-friendly reputation of Silvergate Bank is about to take a big hit – the bank has recently suspended dividend payouts for shareholders, with no end in sight. Clearly, this isn’t something that crypto enthusiasts wanted to hear.
Not So Fun Facts
Let’s take a look at the painful details:
- Silvergate has reported that about $7 million in expected dividend payments will have to wait.
- The bank’s dividend payouts had been fairly consistent over the past 3 years.
- Silvergate’s profits dropped a whopping 60% in the last quarter of 2020.
Let’s be honest – that’s not good news. It’s not as if crypto companies have had it easy in recent times; in many cases, crypto businesses have had to pay a stiff price for being in the right place at the wrong time. Silvergate is no different.
Will Silvergate Lose its Crypto-Friendly Reputation?
It looks like Silvergate will have to fight to retain its crypto-friendly reputation. Of course, while suspending dividend payouts might come as a shock, the move is understandable from a business standpoint. The bank was hit by a combination of falling revenues, high costs, and increasing regulatory pressure- a devastating combination for any business.
And yet, it remains to be seen whether Silvergate will be able to maintain its crypto-credentials in the long term. It is clear that the bank will have to work hard to make sure that crypto entrepreneurs don’t turn away. After all, in an increasingly regulated world, crypto businesses need reliable partners they can count on. And Silvergate’s future depends on being such a partner.
So while the news of suspending dividend payments isn’t exactly something that crypto-enthusiasts wanted to hear, it’s too soon to write off Silvergate. The bank still has a good reputation among crypto-businesses, and if it manages to weather the storm it may yet come out on top.
In the meantime, let’s not forget about all the other crypto-friendly banks out there- who knows, maybe one of them will make a comeback and restore our faith in the crypto industry.
