Although institutional interest in cryptocurrencies saw a major decline in the first quarter of 2022 due to the market being in a weak spot, it was a profitable period for institutional crypto-fiat gateway network Silvergate Bank.
Indeed, the company that facilitates crypto exchanges and institutional investors to transfer U.S. dollars and euros through its Silvergate Exchange Network (SEN) saw its revenue rise by 93%, and its net income by 94% during the first three months of 2022, according to the report published by the bank on April 19.
Institutional interest takes a dive
At the same time, the increase in revenue has accompanied a dipping institutional interest reflected in a drop in SEN transfers to $142 billion in Q1 2022. In other words, the transfers decreased by 14.97% compared to $167 billion in the same period last year.
Moreover, spot trading with Bitcoin (BTC) and Ethereum (ETH) suffered losses during this period as well, having decreased 33% year-over-year to $1.046 trillion, according to the report.
Having said that, Silvergate’s Bitcoin storage division recorded substantial gains as institutional investors deposited around $14.7 in cryptocurrencies during the observed period, which is a 129.69% increase compared to $6.4 billion in the first quarter of 2021.
This success can be attributed to the company’s digital currency deposit gathering strategy which entailed the annualized deposit costs of 0.00% for the first quarter of 2022.
Silvergate in the news
A known crypto lender, Silvergate Bank has provided a major loan to MacroStrategy LLC, a subsidiary of the largest independent publicly-traded analytics and business intelligence company MicroStrategy Incorporated (MSTR), with collateral in Bitcoin, as Finbold reported.
Elsewhere, Silvergate has also become the owner of Mark Zuckerberg’s defunct digital currency venture Diem Accosication, which the crypto-focused bank acquired for nearly $200 million in January and plans to integrate into its SEN payment network.