The cryptocurrency industry has been rocked by the recent news of Silvergate Bank’s liquidation and Silicon Valley Bank’s (SVB) financial difficulties. Market analysts believe that Signature Bank (SBNY) may be a buy as it is considered the “last game in crypto-town.”
Signature Bank’s stock dropped more than 13% on Friday, but by 11:30 p.m. (ET), losses had dropped to 8.55%. Wells Fargo equity analyst Jared Shaw believes that SBNY is the only larger bank that still has a functioning on-ramp for institutional cryptocurrency investors. He also believes that SBNY could use this as a catalyst to move away from in-kind deposits for service to a fee-for-service model, which may be more regulatory and capital friendly.
Piper Sandler market analysts Mark Fitzgibbon and Gregory Zingone noted that SBNY’s balance sheet is significantly larger than that of Silvergate and that SBNY has “many other deposit verticals to depend on.” They also observed that Signature’s stock will continue to be under some pressure in the short term.
The Central Bank of Brazil has also announced that it will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. This news is a positive sign for the cryptocurrency industry, as it shows that central banks are beginning to recognize the potential of digital currencies.
It remains to be seen whether Signature Bank will be able to capitalize on the opportunities presented by the cryptocurrency industry. However, with its larger balance sheet and other deposit verticals, SBNY may be well-positioned to take advantage of this emerging market. Investors should keep an eye on SBNY’s stock and consider whether it is a good buy.