BTIG analyst Mark Palmer notes that Signature Bank (SBNY) CEO Joseph DePaolo stated during a conference presentation that the bank would reduce its crypto deposits by $8B to $10B, thereby reducing the portion of its total deposits that they represent from 23.5% to under 15%. He also noted that Signature Bank was looking to exit its business of providing services to stablecoin issuers. The analyst believes Silvergate Capital (SI) is well positioned to benefit from Signature Bank’s pullback from the crypto space, as he expects platforms that find themselves no longer welcome to use Signet because of its newly imposed deposit limits are likely to turn to Silvergate as an alternative. Signature Bank’s pivot away from crypto is also likely to have a negative impact on the network effects that Signet offers, as the value of such a network to crypto platforms is driven in large part by the number of their counterparties that also belong to it. Palmer has a Buy rating on Silvergate’s shares with a price target of $51.
Published first on TheFly
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