The CEO, Alan Lane of crypto-focused bank Silvergate Capital believes that the bear market isn’t over yet and could see some more pain over the next few quarters. The crypto lender, however, saw a strong second quarter even amidst the market volatility.
The former trader said that the crypto sector may still experience a few areas of pain for some exchanges and crypto funds over the next few quarters, “but at some point, all of that will be done, and then we’ll just be waiting for what’s the next catalyst.”
Lane also cautioned investors to not compare the current crypto market slide to previous ones given the broader global economic reset as digital assets have fallen with macro trends including rising rates and inflationary pressures.
Amidst the news of several crypto lenders going bankrupt, Silvergate reported an 85% rise in net income year-over-year.
“We really try to stay in our lane and not chase the latest fad, but really just focus on what we do well, and essentially just solving problems for our customers,” said Lane.
The Silvergate Exchange Network (SEN), which is a fiat-on-ramp for bitcoin markets, posted a 34% rise in U.S. dollar transfers during the second quarter compared to last year.
According to investment bank Canaccord Genuity the “biggest long term positive for the story was a risk management program that resulted in no loan writedowns, despite significant crypto spot price volatility and some default contagion across the broader ecosystem.”
Also Read: 10 Tips to Survive Crypto Bear Market
Lane also remains positive on the prospect of using Bitcoin for the purpose of lending.
“We’re absolutely still interested in lending against bitcoin,” Lane said. “We believe that is some of the best lending we’ve ever done, and we want to continue to grow that.”
He said that their lending program was built with the acknowledgement of volatility and the current crypto downturn has only proved that Silvergate can withstand volatility in its lending business model.
Recently, Silvergate utilized its SEN Leverage program in a $205 million term loan to Michael Saylor’s MicroStrategy so the business intelligence firm could purchase more bitcoin.
