Small banks were happy to land cryptocurrency-related businesses as clients when the industry was booming. Now that crypto prices have plunged, those banks are on something of a roller coaster.
That’s according to a Monday (Aug. 15) report by The Wall Street Journal (WSJ), which explored the phenomenon from the perspective of three small banks: Silvergate Capital, Signature Bank, and Customers Bancorp.
Silvergate, for example, saw its deposits swing by $5 billion in the second quarter of the year, ending more or less flat at $13.5 billion. The bank reported its second quarterly drop in deposits in the past 10 years, while one of its larger crypto customers declared bankruptcy, the report stated.
The banks’ stocks have taken a wild ride as well, with Silvergate and Signature shares doubling during the market boom in 2021, and Customers’ stock increasing three-fold. Now, Silvergate has fallen almost 30% this year, while Signature and Customers have dropped close to 40%, according to...
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