Silvergate is fighting for survival 😳; Wise’s push for diversification 💸; Continuous struggles at N26 👀

FinTech is Eating the World, 3 March

Hey Everyone,

TGIF! Today’s issue is a perfect one to finish off a great and intense week 🍒 We’re looking at Silvergate's fight for survival (breaking it down & why it’s important for the crypto industry as a whole), Wise’s push for diversification (why it matters + teardown of their brilliant pitch deck and one more read), and continuous struggles at N26 (it’s already a trend and it’s somewhat worrying). Let’s jump straight into the interesting stuff 🌶

Silvergate is fighting for survival 😳

The news 🗞 Silvergate SI 0.00%↑, one of the very few US banks to embrace crypto companies as clients, is in major financial difficulty.

Let’s take a closer look at this so we could understand why it’s a big thing.

More on this 👉 The firm, which once was a top banking partner for most crypto-focused businesses in the US, didn't file its annual report on time and told the Securities and Exchange Commission it may be ''less than well capitalized'' and was ''reevaluating its business.'' These are terrible phrases to hear from a bank, so it’s not surprising that following the announcement shares in Silvergate plunged by more than 30% in after-hours trading. Ouch 🤕

A refresher ♻️ We must remember that Silvergate brought in a solid profit of $76M in 2021. Yet, last year it suffered a whopping net loss of $949M. That’s because the crypto-focused company was dealt a double blow by the bear market and its close exposure to Sam Bankman-Fried's FTX empire.

Public markets have been brutal for the bank too. During the height of the bull run in November 2021, Silvergate stock was trading at highs of $219 — meaning its share price has plunged by 96.5% in a little under 18 months.

The future of crypto is very much tied to the future of Silvergate. Here’s more on this + the takeaway (& 2 more deeper dives into Silvergate):