Today digital asset bank Silvergate Capital provided a fourth-quarter business update in which it disclosed that digital asset customer deposits declined to $3.8 billion at the end of last year, down 68% compared to Q3. Despite what was effectively a run on the bank, it managed to stay liquid, although it resorted to wholesale funding markets during Q4 using debt securities as collateral. Over the past few years, the bank has had a roller coaster ride.
In Q4, it sold $5.2 billion in debt securities to meet withdrawals and lost $718 million from selling securities and derivatives in Q4 2022. However, the cash and equivalents held at the end of 2022 exceeded the total deposits from digital asset customers.
Silvergate operates the Silvergate Exchange Network (SEN), which provides a fiat currency on and offramp to blockchain firms. Its average daily volumes in Q4 were $1.3 billion, up from $1.2 billion from Q3. However, one can assume the cash flow directions may have been different.
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