Shares of cryptocurrency companies drop after Silvergate closure announcement

Cryptocurrency firms took a hit in shares in premarket trading on Thursday after cryptocurrency-focused bank Silvergate revealed plans to voluntarily cease operations as the effects of last year’s FTX implosion reverberated on the sector.

Shares of Silvergate fell 45% to $2.86, a day after hitting an all-time low and losing 64% since the company signaled a continuity risk on March 1. Shares of Signature Bank, which uses blockchain technology, fell 9%.

Coinbase, which cut ties with the bank last week, fell 3%. Cryptocurrency miners Riot Blockchain and Maratona Digital are down 3.5% and 4%, respectively.

Bitcoin stabilized near $21,647, its lowest since mid-February, with analysts and investors saying the impact of the news on the market was limited, as widely expected.

With Silvergate shares down 95% in the past 12 months and 72% so far this year, short selling has been a lucrative trade for bearish investors.

Nearly 85% of the company’s free float is short, with short sellers earning $241 million in year-to-date earnings to market, up 81.9% on an average short interest of $294 million. analyst firm S3 Partners said on Monday.

Source: Terra

Rose

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