• Silvergate Capital shares have dropped 29% in after-hours trading on Wednesday as the crypto-friendly lender raised a “going concern” issue in a regulatory filing.
• Funds managed by State Street and BlackRock, as well as Ken Griffin’s Citadel Securities, have increased their stakes in recent weeks.
• The exact level of TradFi investors’ stakes is uncertain due to lack of recent data and market volatility.
Silvergate Capital Shares Drop After Going Concern Issues
Silvergate Capital shares have tumbled 29% in after-hours trading on Wednesday as the crypto-friendly lender raised a “going concern” issue in a regulatory filing. Facing losses stemming from the FTX collapse in November and regulatory inquiries on a number of fronts, Silvergate Capital said that the filing of its annual report would be delayed, further calling into question its ability to continue as a “going concern.”
Stakes Taken By TradFi Investors
Among the largest holders of Silvergate stock are funds managed by State Street and BlackRock, both of whom have added to stakes in recent weeks. Also, Ken Griffin’s Citadel Securities last week disclosed 5.5% of “market making positions” in the shares.
Uncertainty Over Extent Of Holdings
It is not clear if these stakes represent directional bets by traditional finance players and most filings were made on Dec. 31 according to FactSet data. There is also no recent data available to suggest if these funds remain invested at those levels given recent volatility in the stock.
Impact On Market
The uncertainty surrounding Silvergate’s financial position has caused investor confidence to waver which could lead to further market turbulence ahead for both crypto and traditional finance markets alike.
Foster Open Discourse
In light of this news it is important for industry leaders encourage open discourse between TradFi and Crypto stakeholders so that we can work together towards better understanding each other’s points of view and come up with solutions that will benefit all involved parties going forward