• Silvergate, a California-based crypto bank, is suspending dividend payouts in order to remain liquid during the crypto market’s liquidity crisis of 2022.
• The crypto bank’s primary focus is maintaining a highly liquid balance sheet with a strong capital position.
• Losses were due to several macroeconomic factors and crypto-related events, including a shift in monetary policy that saw central banks hike interest rates to tame inflation.

Silvergate, a state-chartered bank that went public in 2019 and became the first crypto bank listed on the New York Stock Exchange, recently announced that it would suspend dividend payout on its “5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A” to preserve its capital position. The crypto bank said that its primary focus is maintaining a highly liquid balance sheet with a strong capital position, in order to be able to navigate the high volatility in the crypto market.

The decision to suspend dividends comes in response to the crypto market’s liquidity crisis of 2022, which saw prices peak at around $70,000 in November 2021 before plunging to $15,300 in November 2022. This drop was attributed to a number of macroeconomic factors and crypto-related events, including a shift in monetary policy that saw central banks hike interest rates to tame runaway inflation.

The move to suspend dividend payments will leave Silvergate with more capital than customers’ digital assets. However, the bank’s board of directors will re-evaluate the payments of quarterly dividends depending on how market conditions evolve. There was no official comment from any of Silvergate’s executives.

In the meantime, the bank has urged its customers to remain vigilant about any digital currency trading activities, and to be aware of the risks associated with such activities. The bank also recommends that customers diversify their investments and that they consult with a financial advisor before making any decisions.

Overall, Silvergate’s decision to suspend dividend payments is a prudent move to protect itself from the volatility of the crypto market. The bank is confident that its capital position and liquidity will remain strong and allow it to navigate the challenging times ahead.

• The crypto industry is currently showing signs of a major recovery, with Bitcoin risk reversals trading in positive territory and calls being more expensive than puts across multiple tenors.
• QCP Capital’s analysis points out that this bullish sentiment is a result of the macro market and a slight recovery in the economy.
• BitStarz Player Lands $2,459,124 Record Win, indicating that the crypto industry may be in the midst of a major upswing.

The cryptocurrency market has undergone a drastic change in recent times. An analysis by QCP Capital has revealed that the options market in its present state makes the crypto industry seem as though a major crisis such as the shutdown of crypto exchange FTX after filing for bankruptcy, never happened.

The crypto market has come back to life, as evidenced by Bitcoin (BTC) risk reversals trading in positive territory for the past week. This means that calls (buys) have been more expensive than puts (sells) across multiple tenors, which is highly unusual for the sector as BTC typically has a persistent put skew. This is mainly due to miner/treasury hedging activities.

The trading desk at QCP Capital has noted that the sentiment in the cryptocurrency market has shifted from bearish to bullish as a result of the macro market and a slight recovery in the economy. This has been reflected in the pricing of options, with puts trading at higher volatility than calls.

The bullish sentiment has been further highlighted by the recent record win of a BitStarz Player, who walked away with a staggering $2,459,124. This indicates that the crypto industry may be in the midst of a major upswing, with the options market providing a further glimpse of the changing landscape.

As the crypto market continues to evolve, investors should keep an eye on the options market to better understand the sentiment of the cryptocurrency industry. With the current state of the market indicative of a major recovery, the future looks bright for the crypto industry.