Silvergate Bank’s revenue surges in Q1 as institutional crypto trading activity falls


On Tuesday, Silvergate Bank, a crypto-fiat gateway network designed for financial institutions, announced its first-quarter 2022 results. During that period, their revenue and net income increased 93% and 94% year over year, respectively, to $59.9 million and $24.7 million. The company is best known for its Silvergate Exchange Network, or SEN, which facilitates US dollar and euro transfers between cryptocurrency exchanges and institutional investors.

However, despite its growth, institutional interest in crypto was significantly impacted in the first quarter due to the ongoing bear market. As announced by Silvergate, the amount of SEN transfers it facilitated decreased from $167 billion in Q1 2021 to $142 billion in Q1 2022. At the same time, bitcoin (BTC) and ethereum (ETH) spot trading fell 33% for the year as part of broader industry trends, to $1.046 trillion in the first quarter of 2022.

Nonetheless, the company also saw a sharp rise in its cryptocurrency storage segment. Partly due to an annualized cost of deposit of 0.00%, institutional investors placed an average of $14.7 billion in digital assets in Silvergate’s hands, compared to $6.4 billion in the first quarter of 2021.

Cointelegraph previously reported that Silvergate bought Mark Zuckerberg’s stablecoin project Diem for $182 million after it ceased to exist. Silvergate currently sees expanding its stablecoin infrastructure as a key area of ​​growth. Like traditional banks, the company currently generates the majority of its income from interest income; that is, using borrowers’ deposits as collateral to make loans, buy interest-bearing securities, or place them in interest-bearing accounts with other banks.