Silvergate, Crypto Stocks Climb After Bitcoin Notches 5-Month High

  • Silvergate stock surged more than 12% on Monday after bitcoin hit a five-month high over the weekend.
  • Coinbase stock also has been on a tear recently, rising 53% in the past month.
  • Bitcoin is up nearly 36% in the past month amid a rally in broader crypto markets. 

Silvergate and other crypto-linked stocks are climbing after bitcoin notched a five-month high over the weekend.

The crypto-focused bank is up over 12% at $15.45 on Monday, after diving earlier this month on news that customers withdrew $8 billion in deposits late last year amid the collapse of Sam Bankman-Fried’s crypto exchange FTX.

Meanwhile, bitcoin surpassed $23,000 on Sunday, according to Messari, its highest price since August. The token dipped slightly to $22,884 on Monday, but is still ahead 8.5% in the past week. Bitcoin jumped nearly 36% in the past month, erasing losses from the fallout of the FTX crash.

Crypto markets seem unphased by crypto lender Genesis’ bankruptcy filing last week, along with broader financial woes from its parent company Digital Currency Group. Investors may be more comfortable with speculative bets as inflation data earlier this month raised hopes the central bank’s rate hikes could slow down further.

“Cryptocurrency prices continued to record improvements as sentiment among traders became less pessimistic. The expectations of lower inflation, softer monetary policies, and a possibly milder economic slowdown have helped prop up prices above last November’s peak,” Wael Makarem, a senior market strategist at trading platform Exness, said in a statement.

Makarem added: “Additionally, traders expect the Federal Reserve to further reduce the pace of interest rate hikes at their next meeting. This could lead to more risk-taking and a boost in cryptocurrency prices.”

The jump in Silvergate stock comes after the US crypto-focused bank reported a net loss of $1 billion in the fourth quarter of 2022. The financial firm has been rocked by a lengthy crypto bear market, along with contagion from the collapse of industry giants like FTX. 

In a sprinkle of good news, Silvergate revealed that the firm had minimal exposure to now-bankrupt digital asset lender Genesis over the weekend.

Meanwhile, other crypto linked-stocks like Michael Saylor’s MicroStrategy and crypto miner Riot Platform are trading slightly higher, ahead 1% and 1.4%, respectively.

Elsewhere, Coinbase ticked 1% lower Monday but has been on a tear after the company went on a cost-cutting binge and laid off 20% of its staff earlier this month. The crypto exchange’s stock is up over 53% in the past month. 

Amid the broad crypto rally, even so-called “Sam Coins” favored by Bankman-Fried, such as solana and FTT, have trended higher lately.

“The crypto-linked stocks track the crypto markets and [bitcoin] very closely because the user-base and client network of these companies deal heavily in digital assets,” Ajay Dhingra, head of research and analytics at Web3 operating system Unizen, told Insider.

Dhingra added: “Genesis Bankruptcy marks the end of the Grand Deleveraging of crypto markets, and retail is now getting interested to buy these stocks and [bitcoin] at a deep discount.”