Silvergate Bank, one of a few banks that has crypto-related operations in the U.S., added more crypto-clients during the fourth quarter of 2019, but deposits and fee revenues drop from those clients.
The bank headquartered in La Jolla, Calif., which went public in November on the New York Stock Exchange, announced that Crypto Clients rising during Q4 in its earnings release before market open on Wednesday.
Despite the bank added 48 crypto clients, the report showed a 4 percent decline in deposits from the crypto industry. In the same quarter a year earlier, total deposits of the bank retreated by 1.8 percent.
In Q4 results’ press release published on Silvergate website, Alan Lane, president and chief executive officer, commented:
“Our fourth quarter results were in line with our expectations and highlighted by the continued strong growth of the SEN which added 48 digital currency customers in the fourth quarter, bringing our total customers to 804 at the end of the year. The SEN’s strong adoption can also be seen in the network’s digital currency transactions which rose 17% sequentially from the third quarter.”
The bank’s deposit cost, which holds $2.1 billion in assets, rose to 0.84 percent from 0.5 percent. The bank earned $1.4 million in fee revenue from its crypto clients, down 12.5 percent from last quarter’s $1.6 million.
The bank added 11 digital currency exchanges (including over – the-counter trading desks), 21 institutional investors and 16 crypto-businesses (i.e. mining or crypto-application companies).
In 2013, Silvergate turned its focus from traditional commercial banking to the cryptocurrency space as a rich resource of non-interest-bearing deposits. The bank then converts these deposits into interest-bearing deposits on other banks, securities for investments and loans.
Cryptolydian reported mid-January that Silvergate has landed a deal with Bitstamp, the twelfth-largest cryptocurrency exchange, under which Bitcoin leveraged trading will be piloted.