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Silvergate Bank to begin voluntary liquidation

dfpi.ca.gov

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Re: Silvergate Bank to begin voluntary liquidation

#31

Post by shanusmagnus »

yieldcrv wrote: post #26
rippercushions wrote: post #19

Earlier quoted context omitted.

More to the point, Silvergate was one of exactly two banks serving crypto companies in the US. The other, Signature Bank, is also under a lot of regulatory pressure and it has already cut off eg. Binance and Kraken.

There will be other banks and onramps. There was a time before those two banks. And there are many more institutions open to the business now.

What about recent events would suggest more institutions wanting to get a piece of this action? I'm not being snarky, I'm trying to figure out where banking is going to come from now. Cobbled together small players, is that what it looks like?

Re: Silvergate Bank to begin voluntary liquidation

#32

Post by rkagerer »

rkagerer wrote: post #17
dzdt wrote: post #7

Good context by Matt Levine a few days ago [1]. Basically Silvergate did a lot of business with crypto firms and got burned not by crypto speculation but just by holding long maturity safe assets when too many of their customers wanted to withdraw money on a short term basis. The result was falling below the line of being "well capitalised" as a bank. Bank regulation seems to be working here: there is no indication o…

[1] https://archive.is/yH1A5

Silvergate’s assets are real boring normal stuff

Their safe, boring assets weren't safe and boring enough. Why can't there be a bank like this that just keeps your cash as cash?

Re: Silvergate Bank to begin voluntary liquidation

#33

Post by shanusmagnus »

cloudking wrote: post #29
AceJohnny2 wrote: post #6

Earlier quoted context omitted.

Heh, cstross even has a "conspiracy" theory about that sudden shift: https://www.antipope.org/charlie/blog-static/2023/02/place-y... (Which I don't buy)

It takes about 5 minutes playing with ChatGPT to realize it has real time saving value, seems like author hasn't really tried to use it in their work. While I agree there is a hype bubble forming, I disagree with the premise that it only produces garbage.

That's my beef with most of the critical takes. Yeah, it has some warts, but an hour playing with the thing, for both broader chat interaction and writing code, make the value evident, and startling.

Re: Silvergate Bank to begin voluntary liquidation

#34

Post by mnadkvlb »

Octokiddie wrote: post #27
dragontamer wrote: post #22

Earlier quoted context omitted.

> I thought banks were able to sell those long maturity assets for cash to another bank or investor to avoid exactly that kind of situation? Those assets dropped in value by like 20% last year. Check out the stock ticker "TLT", which tracks 20+ year treasuries to see just how bad it was, zoom out to 1-year or 2-years.

That TLT story is being severely under-reported.

TLTs value went down because yields went up. This is by design, anyone who invested in TLT at zero rates should have known the yields to price function. Honestly i dont see whats to hide here in reporting ??

Can you explain what am i missing here ?

Re: Silvergate Bank to begin voluntary liquidation

#35

Post by lmm »

yieldcrv wrote: post #26
rippercushions wrote: post #19

Earlier quoted context omitted.

More to the point, Silvergate was one of exactly two banks serving crypto companies in the US. The other, Signature Bank, is also under a lot of regulatory pressure and it has already cut off eg. Binance and Kraken.

There will be other banks and onramps. There was a time before those two banks. And there are many more institutions open to the business now.

> And there are many more institutions open to the business now.

Is that really true? I got the impression the cryptocurrency industry was shrinking these days, with lots of companies that had previously announced involvement now exiting.

Re: Silvergate Bank to begin voluntary liquidation

#36

Post by toomuchtodo »

mnadkvlb wrote: post #34
Octokiddie wrote: post #27

Earlier quoted context omitted.

That TLT story is being severely under-reported.

TLTs value went down because yields went up. This is by design, anyone who invested in TLT at zero rates should have known the yields to price function. Honestly i dont see whats to hide here in reporting ?? Can you explain what am i missing here ?

You’re not missing anything. If you invested in mid to long duration bonds right before the Fed started rocketing rates, you had a bad time.

Re: Silvergate Bank to begin voluntary liquidation

#38

Post by walterbell »

WSOP coverage:

https://wallstreetonparade.com/2023/03/fdic-investigators-ar...

> Silvergate’s ability to find a white knight bidder to “salvage” the bank ended when gutsy U.S. Senators Elizabeth Warren (D-MA), John Kennedy (R-LA), and Roger Marshall (R-KS) released a letter on January 30 to the bank’s CEO, Alan Lane.

https://wallstreetonparade.com/2023/03/silvergate-a-federall...

> Another way that Silvergate apparently met the run on the bank was to obtain $4.3 billion in advances from the Federal Home Loan Bank of San Francisco – a program meant to support housing for the poor.

Re: Silvergate Bank to begin voluntary liquidation

#39

Post by quickthrowman »

Octokiddie wrote: post #27
dragontamer wrote: post #22

Earlier quoted context omitted.

> I thought banks were able to sell those long maturity assets for cash to another bank or investor to avoid exactly that kind of situation? Those assets dropped in value by like 20% last year. Check out the stock ticker "TLT", which tracks 20+ year treasuries to see just how bad it was, zoom out to 1-year or 2-years.

That TLT story is being severely under-reported.

What do you mean underreported? TLT losing value isn’t news. The average duration of TLT’s US Treasurys is ~20 years—if rates go up 1%, the bond principle value goes down ~15-20%. The 20y treasury yield went from ~2% in Jan22 to 4% in Mar23, and TLT went from $150->$100 in the same time period.

Anyone who knows what TLT is likely knows about duration risk.

https://www.fidelity.com/learning-center/investment-products...

Re: Silvergate Bank to begin voluntary liquidation

#40

Post by Temporary_31337 »

rkagerer wrote: post #32
rkagerer wrote: post #17

Earlier quoted context omitted.

[1] https://archive.is/yH1A5

Silvergate’s assets are real boring normal stuff Their safe, boring assets weren't safe and boring enough. Why can't there be a bank like this that just keeps your cash as cash?

Because customers expect low or no fees for just holding cash.
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