Silvergate Bank Adds 46 Crypto Clients, Deposits Surge by 35% in Q1

Silvergate Bank, an American banking institution, has begun to benefit from the decision to add crypto firms to its list of customers.

Earlier this week, the California-based company released its financial reports for the first quarter of the year. In it, the firm confirmed that it had added 46 crypto customers to its list in the quarter, while deposits and fee incomes surged as well.

Crypto-Focus Works to Silvergate’s Benefit

In the release, the firm pointed out that the increase in total deposits was driven significantly by a surge in the number of deposits from crypto customers. Fee incomes from digital asset customers increased by $300,000, while deposits surged by 35 percent, amounting to about $1.8 billion.

“The increase in total deposits from the prior quarter was driven by an increase in deposit levels from our digital currency customers who maintained excess capital with Silvergate as a result of the dislocation taking place in the digital currency markets during March.”

The bank went public on the New York Stock Exchange (NYSE) last November, with the ticker SI. It’s already built a strong base for itself also, with $2.3 billion in total assets under management. Essentially, this means that crypto deposits now make up to 73 percent of Silvergate’s total assets.

Silvergate has so far become one of the most crypto-friendly banking institutions. In an economy where the divides between the traditional financial and crypto spaces continue to widen, the firm has managed to bridge the gap, endearing itself to companies in the space.

Silvergate’s Impressive Crypto Portfolio

So far, Silvergate has 850 digital currency customers. Including 541 institutional investors, 61 crypto exchanges, and 248 others. In the last quarter, institutional customers increased by 32, and the firm has also confirmed that it has 200 prospective customers coming in too.

The firm already has names like Kraken and the Gemini exchange amongst its clients. It also started offering crypto-collateralized loans last August. At the time, the firm stated that it had found an increase in the demand for crypto-related borrowing. Its loan service provides crypto assets or dollars in exchange for greater credit.

The firm also saw gains in its Silvergate Exchange Network (SEN), which helps to process transactions. The network completed 31,405 transactions in Q1 2020, over twice the 14,400 that it processed in Q4 2020.

The network’s volume also increased to $17.4 billion in the quarter, a $7.8 billion surge. The bank has confirmed that it would be adding more products to the network in the coming months, including a Bitcoin on-margin leverage feature.

However, the stellar quarter hasn’t come without its challenges. Most notably, the transfer issues. Silvergate customers experienced some difficulty with getting money transfers. The issue was first raised on March 23, when industry news source Cointelegraph explained that the bank’s customers had problems with its payment processor, Fedwire.