On Tuesday, Silvergate Bank, a crypto-fiat gateway network designed for financial institutions, announced its results for the first quarter of 2022. During this period, its revenue and net income grew by 93% and 94% year-over-year, respectively, to $59.9 million and $24.7 million. The company is most notable for its Silvergate Exchange Network, or SEN, which facilitates U.S. dollar and euro transfers between cryptocurrency exchanges and institutional investors.
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Despite its growth, however, institutional interest in crypto took a significant hit in Q1 due to the ongoing bear market. As told by Silvergate, the amount of SEN transfers it facilitated decreased from $167 billion in Q1 2021 to $142 billion in Q1 2022. Simultaneously, as part of broader industry trends, Bitcoin (BTC) and Ethereum (ETH) spot trading fell 33% year-over-year to $1.046 trillion in Q1 2022.
Nevertheless, the company also saw a sharp increase in its cryptocurrency storage segment. Partly due to an annualized cost of deposit of 0.00%, institutional investors placed an average of $14.7 billion in digital assets in Silvergate’s hands, compared to $6.4 billion in Q1 2021.
Cointelegraph previously reported that Silvergate purchased Mark Zuckerberg’s stablecoin project, Diem, for $182 million after it became defunct. Silvergate currently sees expanding its stablecoin infrastructure as a key area of growth. At the moment, like traditional banks, the company derives the vast majority of its revenue from interest income; that is, using borrowers’ deposits as collateral to issue loans, purchase interest-bearing securities or depositing them in interest-bearing accounts at other banks.