Bloomberg: The Fed's rate hikes accelerated Silvergate's collapse

ChainCatcher news, Bloomberg analyzed the reasons behind the shutdown of the crypto bank Silvergate in a recent report, including lack of diversification, maturity mismatch, and high exposure to cryptocurrencies.

Among them, due to the uniqueness of Silvergate's balance sheet, Silvergate did not pay interest on deposits for its cryptocurrency clients, effectively having a "free pool of funds" to invest in government debt and similar liquid assets. However, the Federal Reserve's continuous interest rate hikes led to a collapse in Silvergate's securities portfolio, and a bank run forced Silvergate to sell these securities at a low price, accelerating the collapse. (Bloomberg)