What the Silvergate Death Spiral Means for the Crypto Industry
The Breakdown
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Cryptocurrency Market - What's Next?
Silvergate launched a business lending platform catered specifically to crypto firms. Silvergate saw a reasonably strong demand for Bitcoin backed loans initially, growing their Bitcoin backed loan book to $571 million by the end of 2021. In March of last year, Michael sailors micro strategy announced that it had taken a $205 million loan from Silvergate backed by around 20,000 Bitcoin on a three year term. At the time, the Bitcoin collateral was worth around $820 million, but its value is now slashed in half. Stock almost down to its all time lows after hours. Who do you think buys the assets and who buys the debt? Whoever buys the debt can decide if they call the sailor loans.
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