• Microstrategy recently took to Twitter to reassure investors of its supposedly “minimal exposure” to Silvergate, a struggling crypto bank.
• This was not taken lightly by the market with major cryptos tumbling by 5% in the daily time frame.
• The entire Silvergate debacle started when FTX, one of the bank’s biggest partners, collapsed leaving Silvergate and the whole crypto market in tailspin.
Silvergate Quake: What Happened?
The entire Silvergate debacle started when FTX, one of the bank’s biggest partners, collapsed leaving Silvergate and the whole crypto market in tailspin. Since then, the company has been on some sort of life-support, with Q4 earnings metrics dropping substantially. As a result, the company’s delayed 10-K filing prompted its partners to distance themselves to mitigate possible losses. Industry giants like Coinbase, Circle, Paxos, Galaxy and CBOE recently released statements regarding their respective exposures.
Microstrategy Reassures Investors
Microstrategy recently took to Twitter to reassure investors – and the market as a whole – of its supposedly “minimal exposure” to Silvergate, a struggling crypto bank that has since been the subject of online discourse after news of a later-than-usual 10-K filing sends shockwaves to its stocks and the crypto market. According to the tweet, the company explained to its 175,000 followers that even if Silvergate becomes insolvent, the $205 million loan by Microstrategy won’t be accelerated to meet the bank’s financial needs.
Market Reaction To MicroStrategy Reassurance
This was not taken lightly by the market with major cryptos tumbling by 5% in daily time frame. Don’t wait! Jump on this Crypto Deal and get a 150% Welcome Bonus plus 100 Free Spins on your deposit today! We have a loan from Silvergate not due until Q1 ’25. There are mkt concerns re SI’s fin condition. For anyone wondering;the loan wouldn’t accelerate b/c of SI insolvency or bankruptcy .Our BTC collateral isn’t custodied w/ SI & we have no other financial relationship w/ SI — MicroStrategy (@MicroStrategy) March 2 2023
Potential Spillovers Ahead
Since the bank has been running on deficit ever since it suffered an $8 billion Bank Run last year;the company received loans amounting $3 billion from Federal Reserve Bank Of New York which is due first quarter 2025 .This spark concern about another cataclysmic event for crypto with some going as far as calling probable bankruptcy Of silver gate be second FTX .
Microstrategy’s assurance about minimal exposure didn’t help much for investor sentiment amid fears that silver gate could become insolvent anytime soon , leading into another episode similar like FTX collapse .It remains uncertain how will this affect future price movement Of Cryptocurrency Market .