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According to Form 13G filed with the Securities and Exchange Commission (SEC), Ken Griffin’s firm owns about 1.73 million shares in Silvergate Capital.
Silvergate Capital Corporation (NYSE: SI), a crypto-oriented bank that was largely implicated in the FTX and Alameda fraud charges, has recorded a sharp uptick of institutional investors interested in its stock market in the past few months. Consequently, SI shares have been on the rise for the past 30 days having gained more than 30 percent. However, the gains in SI shares spiked in the past 24 hours, as they closed Tuesday trading at $17.36, up 18.01 percent. The SI gains continued during the after-hours with approximately 4.09 percent. The sudden spike in SI shares has been attributed to the announcement that market maker Citadel Securities purchased a 5.5 percent stake in Silvergate worth approximately $25 million.
According to Form 13G filed with the Securities and Exchange Commission (SEC), Ken Griffin’s firm owns about 1.73 million shares in Silvergate Capital. A person familiar with Citadel Securities noted that the filing is a result of the firm’s options market-making activities rather than a directional investment or stake in Silvergate. Notably, options’ positions are calculated based on long call positions, regardless of any offsetting short calls or puts.
UPDATE: Citadel Securities discloses a 5.5% stake in crypto friendly bank Silvergate $SI.
**Ken Griffin’s hedge fund joins State Street Bank $STT 9.3% and Blackrock $BLK 7.2% as major shareholders.
— Andrew (@AP_Abacus) February 14, 2023
Silvergate (SI) Shares Outlook
As a crypto-oriented financial institution, Silvergate has seen its stock market correlate a lot with the 2022 bear market. According to aggregate data provided by MarketWatch, SI share dropped approximately 86 percent last year. Nonetheless, Silvergate CEO Alan Lane has reiterated the company’s mission to provide institutional investors exposure to cryptocurrency. Furthermore, the company has invested in Bitcoin and digital assets infrastructure for the past ten years.
As a result, institutional investors have poured money into Silvergate including Susquehanna that purchased about 2.37 million shares, or a 7.5 percent stake, in Silvergate Capital. Additionally, BlackRock Inc (NYSE: BLK) announced a 7.2 percent stake in Silvergate Capital as of December 31.
The plethora of institutional investments in Silvergate comes despite a $1 billion net loss reported during the fourth quarter of 2022. As of December 31, the company reported a total of 1,620 digital asset customers. Interestingly, the Silvergate Exchange Network (SEN) handled approximately $117.1 billion of transfers in the fourth quarter of 2022.
Part of the company’s losses came from FTX-induced constraints on DCG-backed Genesis Global Trading which accounted for less than $2.5 million as of January 19, 2023. Nonetheless, the company continues to be investigated by the United States regulatory agencies for its role in FTX and Alameda’s collapse.