Silvergate Bank Struggles: Microstrategy Reassures Minimal Exposure

• Microstrategy recently took to Twitter to reassure investors that their company had minimal exposure to Silvergate, a struggling crypto bank.
• The whole debacle started when FTX, one of the banks biggest partners, collapsed. As a result, the company’s delayed 10-K filing prompted its partners to distance themselves from it in order to mitigate possible losses.
• Industry giants like Coinbase and Circle have released statements regarding their respective exposures and this sparked concerns about another cataclysmic event for crypto with some calling the probable bankruptcy of Silvergate as the “second FTX”.

Silvergate’s Struggles

Microstrategy recently took to Twitter to reassure investors – and the market as a whole – of its supposedly “minimal exposure” to Silvergate, a struggling crypto bank that has since been the subject of online discourse after news of a later-than-usual 10-K filing sends shockwaves to its stocks and the crypto market. According to the tweet, the company explained to its 175,000 followers that even if Silvergate becomes insolvent, their $205 million loan won’t be accelerated in order to meet the bank’s financial needs.

The Market Reacts

This statement was not taken lightly by the market with major cryptos tumbling by 5% in the daily time frame. Don’t wait! Jump on this Crypto Deal and get a 150% Welcome Bonus plus 100 Free Spins on your deposit today! We have a loan from Silvergate not due until Q1 ’25. There are mkt concerns re SI’s fin. condition. For anyone wondering, the loan wouldn’t accelerate b/c of SI insolvency or bankruptcy. Our BTC collateral isn’t custodied w/ SI & we have no other financial relationship w/ SI.— MicroStrategy (@MicroStrategy) March 2nd 2023

What Led To This?

The entire Silvergate debacle started when FTX, one of the bank’s biggest partners, collapsed leaving Silvergate and the whole crypto market in tailspin. Since then, they’ve been on some sort of life-support with Q4 earnings metrics dropping substantially resulting in their delayed 10-K filings prompting their partners distance themselves in order to mitigate possible losses. Industry giants like Coinbase, Circle, Paxos,, Galaxy and CBOE all released statements regarding their respective exposures indicating rising concern over another catastrophic event for cryptocurrency markets with some going so far as calling it potentially “the second FTX” collapse if it comes into fruition..

Microstrategy: Potential Spillovers Ahead?

Since Silverbank has been running on deficit ever since an $8 billion run last year they received loans amounting up $3 billion from Federally Insured Depository Institutions which both helped them stay afloat but also raised questions about potential spillovers should things go south which is why Microstrategies reassuring tweet was met with such cautionary response from investors worldwide .

Conclusion

Ultimately only time will tell what becomes of Silgergates future but Microstrategies attempt at assuring investors about minimal exposure certainly demonstrate how much power one corporations statement can hold within an industry as speculative as cryptocurrency markets . It remains uncertain whether or not these attempts were successful enough however only time will tell how this story plays out .