Silvergate Records Strong Financial Position In Q2, Stock Up Over 20%
- However, Silvergate recorded a decline in revenue acquired from its crypto clients.
- Within the two quarters, the firm posted a revenue decline of $100,000k.
Silvergate Capital Corp. (NYSE: SI) recorded a remarkable profit in the second quarter of the year. According to the company’s report to investors, the firm’s net income moved above 84.6 percent year-over-year to $38.6 million. This is a laudable development from its previous $27.4 million.
As revealed, shareholders will get dividends of $1.13 per share. It represents a significant return increment as they earned $0.79 per share in the first quarter.
Notably, The Silvergate Exchange Network (SEN) managed about $191.3 billion in transactions in the U.S dollar in Q2. As indicated, it reflects a 34 percent growth described in relation to what was recorded in the Q2 of 2021.
Worth Noting that the overall SEN leverage commitments pushed up to $1.4 billion at the end of Q2. The figures indicated a development compared to the recorded $1.1 billion. A remarkable growth correlated to the $258.5 million it acquired in the Q2 of 2021.
Also, the financial giants enjoyed a remarkable increment in the size of their cryptocurrency users for Q1. In Q1, it had about 1,503; now, it has about 1,585 for Q2.
Silvergate Struggles in Cryptocurrency Market
However, Silvergate recorded a decline in revenue acquired from its crypto clients. Within the two quarters, the firm posted a revenue decline of $100,000k. This replicates the drop of $8.9 million to $8.8milion. Meanwhile, in Q2 last year, the firm recorded $11.3 million from crypto transactions.
In Q2, the average deposit made by its cryptocurrency users amounted to $13.8 billion. A significant drop compared to the $14.7 billion it reported in Q1.
The decline in revenue from cryptocurrency transactions results from the current market situation. Before posting its financial records for Q1, the firm’s CEO, Alan Lane, revealed plans to broaden the company’s Bitcoin lending initiative. Before that, the firm gave out a loan of $205 million in BTC to MicroStrategy. The CEO referred to that with promises of increasing the firm’s capacity on BTC loans.
Early this year, Silvergate collaborated with Diem to inaugurate a dollar-backed stablecoin. As reported, Silvergate would both oversee the reserves and hand out the stablecoin. Subsequently, Silvergate acquired the stablecoin project because Diem could no longer proceed with the plan. Therefore, compelling Diem to shut down. The takeover included using Diem’s operational tools to run a blockchain-based payment platform.
According to market data provided by MarketWatch, Silvergate stock has been exchanging hands around $78.38, up 20 percent from the day’s opening price.
The CEO also aired his opinion about the latest quarter. He opined that Q2 is a strong one for the firm. He said the organization is doing well despite the difficult challenges that have befallen the cryptocurrency industry. Lane expressed his satisfaction with the success Silvergate has recorded in Q2.