March 6 (Reuters) - Silvergate Capital Corp shares (BREAST) it fell as much as 11% on Monday after the bank suspended its crypto payment network and expressed doubts about the viability of its business.
The stock closed the volatile session down 6.4% at $5.40, after swinging wildly between gains and losses throughout the day.
Several cryptocurrency stocks also closed in negative territory. Signature Bank Crypto Lending Exchange (SBNY.O) it was down 2.5%. BTC mining machine manufacturers Ebang International and Canaan Inc (SPOUT) they fell 2.8% and 8.4%, respectively. MicroStrategy BTC Buyer (MSTR.O) declined 3.8% and traded Coinbase Global (COIN.O) fell 2.7%.
Crypto-focused bank Silvergate saying late on Friday, it had made a "risk-based decision" to discontinue the Silvergate Exchange Network (SEN) with immediate effect.
"The SEN is Silvergate's main flagship product that was previously the key attraction for depositors to bring funds to the bank," Wedbush analysts said.
The outage could indicate that Silvergate may consider closing down operations, they added.
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Shares of Silvergate hit a record low of $4.86 on Friday, losing nearly 98% of their value since closing at an all-time high in November 2021 and wiping out more than $7 billion of market capitalization. of the company
โThe crypto market reacted to the negative news from Silvergate Bank, with bitcoin and ethereum falling around 4.8% for the week,โ analysts at the Bernstein brokerage said.
"We believe a default/liquidation scenario is a clear possibility and have reached a liquidation value of $5 per share," the Wedbush analysts said. The estimated price marks a drop of approximately 13% from the stock's previous close.
A host of crypto heavyweights, including Coinbase Global, have abandonment Silvergate as your banking partner.
The firm has been struggling to stay afloat after the collapse of Sam Bankman-Fried's crypto exchange FTX in November prompted investors to withdraw $8 billion in deposits from the bank in the last three months of the year.
Silvergate reported a $1 billion net loss in the fourth quarter.
Reporting by Manya Saini in Bangalore; Edited by Anil D'Silva, Devika Syamnath and Krishna Chandra Eluri
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