Silvergate Bank Sees 40% Increase in Deposits From Digital Currency Customers

Silvergate Bank added $586 million in new deposits from firms and individuals in the cryptocurrency industry in the third quarter of 2020, according to an earnings report released before the market opened Monday.

The cost of those deposits dropped from 0.37% down to 0.01% and the bank’s fee income for digital currency customers increased by nearly 40% to $3.3 million with more than 68,000 transactions on the Silvergate Exchange Network, a fiat on-ramp for bitcoin markets.

The bank added 47 new digital currency clients, bringing its total customer base from the industry up to 928. 

The majority of new customers – 33, Silvergate reported – were institutional investors. 

The bank also saw a $13 million increase in its bitcoin-backed fiat loans, called SEN Leverage, up to $35.5 million in the third quarter. 

“Silvergate continues to perform at a very high level as the network effect and competitive barriers of the SEN further expand, the credit metrics of our loan portfolio remain strong, and the Bank remains well capitalized, with a strong liquidity position, to support future growth,” Silvergate CEO Alan Lane said in the release. 

This story is developing and will be updated following the Silvergate earnings call later today.

Read more: Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter