Silvergate Bank which is one of the first banks which opened its door for cryptocurrency users is gaining a lot due to its courageous step in the past.
The bank announced in the investor call today that it made around $586 million in Cryptocurrency deposits in quarter 3 of 2020. Resulting in its Cryptocurrency reserves increasing to 2.1 Billion USD by the close of September 2020.
The Crypto assets for the bank were close to 1.5 Billion USD by June. While Signature Bank, the top competitor of Silvergate Bank in terms of Crypto assets, increased its digital deposits by 1 Billion USD.
The increase recorded in Q3 of Silvergate is the single most massive deposit growth Silvergate bank has seen since 2017.
Bank Credits Bitcoin for Increase in Crypto Deposits
The adoption of Bitcoin has contributed to the growth of the bank. The Silvergate bank leadership said that the notable increase is due to Bitcoin’s strong run and its acceptance by the leading corporate as an asset for investment. However, Silver Gate bank CEO Alan Lane highlighted that various cryptocurrency assets could not be considered for long term investment assets as they are highly volatile and change weekly and monthly.
It is interesting to note that the bank’s fee income from Crypto customers has grown almost 40 percent, as around 68000 transactions took place on the Silvergate network. An increase of $3.3 Million was noted in income. Silvergate Bank attracted approximately 33 new customers recently, with the majority being institutional investors. The overall increase in digital currency deposits was seen across all segments, though.
First Bank to Create a Centralized System
Silvergate Bank created the first Centralized service for its customers to make fast and easy purchases of Cryptocurrency. Through Silvergate Exchange Network (SEN), the bank allowed various lines of credit worth 35.5 million. The bank has facilitated the centralized solution to its customers only; however, the plans to create an open source version is also considered.
Lane said that “Silvergate has an exciting growth engine for SEN,” which would encourage many corporates and fintech companies to invest in Bitcoin and help in the growth of the entire cryptocurrency network. Most recently, the frontrunning bank onboarded additional 47 digital currency clients making it to a total of 928. The bank said that more than 200 clients from the industry are most likely to join soon.