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Bitcoin price slides 5% in 60 minutes amid Silvergate uncertainty

March 3, 2023 Coin Telegraph

10-K Filing

The price of BTC has fallen a steep 5% in 60 minutes in the early hours of Mar. 3, wiping $22 billion from Bitcoin's market cap.

The price of Bitcoin (BTC) has fallen over 5% from $23,500 to $22,240 in just over 60 minutes, amid a wave of uncertainty concerning crypto-friendly bank Silvergate Capital.

The price drop has wiped $22 billion from Bitcoin's total market capitalization, which is now at $430.9 billion, according to Cointelegraph Markets Pro.

Ethereum (ETH), XRP (XRP), Cardano (ADA) and Polygon (MATIC), and other non-Bitcoin cryptocurrencies have also suffered a similar sharp decline.

Bitcoin just dropped $1200 in less than 30 minutes.
— The Wolf Of All Streets (@scottmelker) March 3, 2023

While the exact cause behind the steep $1,200 price drop isn't clear, the fall is coinciding with the recent controversy surrounding Silvergate Bank and the delayed filing of its annual 10-K financial report.

Markus Thielen, the head of research at digital asset platform Matrixport told Cointelegraph that the $1200 price fall is linked to recent Silvergate Bank controversy with its delayed annual 10-K financial report filing, in addition to an increased effort by United States regulators attempting to restrict ties between banks and crypto firms:

The drop is due to the continuous fallout from Silvergate bank as there is now more uncertainty about fiat on-and-off ramp. In addition, there are now wider industry concerns that US regulators are trying to cut off further banking relationships between crypto firms and FDIC insured banks. Nevertheless, this is playing into the hands of Hong Kong and China that are becoming more crypto friendly."

"We have seen an increase in stablecoin activity as a sign that crypto firms are using crypto rails to move money around," he added.

Several technical analysts on Twitter claimed to have predicted the fall from $23,000 resistance, however, the reasons causing the push down are not clear.

*Bitcoin price chart. Source: Cointelegraph Markets Pro*

The last time BTC was priced at $22,250 was Feb. 15.

The sharp fall comes despite an increase start to 2023, with BTC still up 34.8% since it was priced at $16,550 on Jan. 1.

MicroStrategy, Tether adds to firms distancing from Silvergate as stock dives 57%

March 3, 2023 Coin Telegraph

10-K Filing

MicroStrategy confirmed that none of its 130,000 BTC is custodied by Silvergate. However, the firm does have a loan to pay off to the bank by Q1 2025.

Business intelligence firm MicroStrategy and stablecoin issuer Tether have become the latest two firms to publicly deny any meaningful exposure to Silvergate Bank.

The news comes after Silvergate announced on March 1 that it would postpone the filing of its annual 10-K financial report, which has many fearing the cryptocurrency bank may be on the brink of a bankruptcy filing.

This led MicroStrategy — which holds over 130,000 Bitcoin (BTC) — to confirm that its BTC collateral is not custodied with Silvergate.

The Michael Saylor-founded firm added that it will not need to pay back a loan from Silvergate until Q1 2025 and that a bankruptcy or insolvency event wouldn’t “accelerate” the loan repayment.

We have a loan from Silvergate not due until Q1 ‘25. There are mkt concerns re SI’s fin. condition. For anyone wondering, the loan wouldn’t accelerate b/c of SI insolvency or bankruptcy. Our BTC collateral isn’t custodied w/ SI & we have no other financial relationship w/ SI.
— MicroStrategy (@MicroStrategy) March 2, 2023

Paolo Ardoino, the chief technology officer of Tether, confirmed in a March 2 tweet that Tether is not exposed to Silvergate either.

#Tether does not have any exposure to Silvergate.
— Paolo Ardoino (@paoloardoino) March 2, 2023

A collapse of the cryptocurrency bank could prove costly for the rest of the industry.

Silvergate is a fintech firm that provides financial infrastructure solutions and services to some of the largest cryptocurrency exchanges, institutional investors and mining companies in the world.

It offers a 24/7 payments platform, named Silvergate Exchange Network, which has reportedly processed over $1 trillion in transactions since 2017.

The firm also provides a stablecoin infrastructure platform, digital asset custody management and collateralized lending services to several institutional players in the cryptocurrency industry.

*A diagram of Silvergate’s clientele and crypto offerings. Source:* *Silvergate Bank*

Despite the large network effects, the late 10-K filing appears to have had a consequential effect on its partnerships.

Within 24 hours of the late 10-K filing, Coinbase, Circle, Bitstamp, Galaxy Digital and Paxos confirmed that they will scale back their partnerships with the cryptocurrency bank in some capacity.

Gemini also announced that it has stopped accepting customer deposits and processing withdrawals through Silvergate ACH and wire transfers.

Others who have seemingly cut or reduced ties include Crypto.com, Blockchain.com, Wintermute, GSR and Cboe Digital, according to reports.

Silvergate failed to file their annual report citing regulatory investigations. Possibly not solvent.

They already lost majority of their partners. pic.twitter.com/LKdQtNfRRe
— Quinten | 048.eth (@QuintenFrancois) March 2, 2023

Concerns of Silvergate’s potential financial troubles first surfaced in Q4 2022, when it reported a net loss of $1 billion as a result of the shock collapse of FTX in November.

The exact dealings between Silvergate and FTX have been subject to a probe by the United States Department of Justice recently, although there’s been no accusation of wrongdoing at this point.

Plaintiffs in a newly proposed class-action lawsuit against FTX on Feb. 14 accused Silvergate of “aiding and abetting” a “multibillion-dollar fraudulent scheme” that was orchestrated by former FTX CEO Sam Bankman-Fried.

Despite many firms recently claiming not to have exposure to Silvergate, the bank still processed over $3.8 billion in customer deposits in Q4 2022. This was a steep fall from $11.9 billion in Q3 2022, according to Silvergate.

*Silvergate’s change in share price index on the New York Stock Exchange. Source:* *MarketWatch.*

Since the news of the late 10-K filing on March 1, Silvergate’s stock price has fallen a massive 58.7% to $5.57. The stock is now down over 97% since its all-time high of $219.7, hit on Nov. 14, 2021.

Stablecoins and CBDCs might play ‘meaningful role’ in payments — Visa CEO

January 25, 2023 Coin Telegraph

al kelly

Visa began working on a blockchain interoperability project in Sept. 2021 to support CBDC and stablecoin adoption but few updates have been made since.

The chief executive of credit card giant Visa remains confident that blockchain-powered solutions can be integrated into its services and offerings to power the next generation of payments.

Speaking on a call at Visa’s annual stockholder meeting on Jan. 24, outgoing CEO Al Kelly — who will officially step down on Feb. 1 — briefly shared the firm’s plans for Central Bank Digital Currencies (CBDCs) and private stablecoins.

According to a Jan. 24 report from San Francisco Business Times, Kelly said:

“It’s very early days, but we continue to believe that stablecoins and Central Bank Digital Currencies have the potential to play a meaningful role in the payments space, and we have a number of initiatives underway.”

“We’ve had an immaterial amount of investments in crypto funds and companies as we seek to invest in the payments ecosystem,” the outgoing CEO explained.

Kelly also confirmed that Visa’s balance sheet hasn’t been impacted by some of the “high-profile failures” that rocked the cryptocurrency space in 2022:

“We’ve had no credit losses related to these failures [...] In everything we do, please know that we’re extremely focused on maintaining the integrity of Visa’s payment system and the payment system in totality and of course, the reputation of our brand standing for trust.”

Over the years, Visa has worked on a number of crypto-related initiatives.

Its research team began working on a blockchain interoperability project in September 2021, named the Universal Payment Channel (UPC) initiative, the project was designed to establish a “network of networks” for CBDCs and private stablecoins to pass through various payment channels.

Visa hasn’t provided an update on the UPC in over 12 months, however.

More recently, the payment giant announced on Dec. 20, 2022, that it was chalking up a plan to allow automated bills to be paid out from a user’s Ethereum-powered wallet.

Visa has also rolled out several “zero fee” cryptocurrency debit cards of late including a now-terminated agreement with FTX and a partnership with Blockchain.com on Oct. 26, 2022, which is still in effect.

*A sample Visa-FTX debit card before Visa ultimately terminated the partnership agreement. Source:* *Yahoo Finance.*

While Visa’s 2022 annual report only included data up until Sept. 30 — about five weeks before FTX collapsed — more information may be revealed in Visa’s Q1 2023 earnings call on Jan. 26.

Visa President Ryan McInerney will officially replace Al Kelly as CEO on Feb. 1, while Kelly will remain on board as executive chairman.

McInerney appears to be equally, if not more bullish on blockchain-powered payment solutions too.

In an interview with Fortune in November 2022, McInerney said Visa still has “$14 trillion of cash out there being spent by consumers that can be digitized” and that they’re continuing to explore where crypto payments may be best leveraged.

VeChain Foundation reports $1.2B crypto treasury… but spent just $4M in Q1

May 11, 2022 Coin Telegraph

VeChain Foundation reports .2B crypto treasury… but spent just M in Q1

Coin Telegraph

The supply chain tracking project has a comfortable cushion in its Foundation treasury, but expenditures were very low through the first quarter of 2022.

The VeChain Foundation has released its financial report for Q1 2022 showing that the project amassed an impressive $1.2 billion war chest but only spent about $4.1 million in the quarter.

VeChain (VET) is a blockchain project designed to enhance supply chain management..

The Foundation’s May 10 financial report for Q1 2022 outlines its balance sheet as of March 31 and how it spent funds through the quarter. Although the treasury opened the year with $1.37 billion in assets between stablecoins, Bitcoin (BTC), Ether (ETH), and VET, it ended with $1.2 billion. The report states that most of the losses were incurred “due to crypto market fluctuations and other VeChain Foundation outgoings.”

The BTC price has fallen 34% since, ETH has fallen 36%, and VET has fallen 54% since Dec. 31, 2021 when the project marked the beginning of its Q1 tracking through March 31.

In the interest of continued transparency relating to the holdings and expenditures of the #VeChain Foundation, we are happy to share the Q1 2022 Financial Report:https://t.co/eJzc3NmBAx #SmartContracts #Blockchain #Finance #Cryptocurrency #VeChainThor $VET $VTHO
— VeChain Foundation (@vechainofficial) May 10, 2022

Of the $4.1 million outlaid in the first quarter the Foundation spent $1.8 million on ecosystem business development, which was the highest expense. That includes partnerships, custodians, wallet providers, brokers, community events, and ecosystem project cooperation.

VeChain Foundation treasury from Q1 2022

Next was $1.1 million on ecosystem operations such as team costs, office space, utilities, consulting fees, and external services.

While the report states that the treasury will be used to “ensure the long term development of the VeChainThor blockchain,” it is unclear whether the foundation will open the faucet on its treasury for more expenditures on investments.

VeChain Foundation Expenditures through Q1 2022

Also absent from the report is how much money the Foundation earned through the first quarter. The VeChainThor blockchain collects fees for transactions that are distributed between validators and other stakeholders in the ecosystem. However, data on the total amount of fees accrued is not clear from the financial report.

VeChain’s carbon emissions data management system and VeCarbon’s partnership with cement industry players were announced in the financial report.

Related: VeChain can be used as payment in 2M stores — and VET bridged to BNB chain

During Q1, VeChain launched its own stablecoin through the Stably stablecoin issuer known as VeUSD. It also formed a partnership with Amazon Web Service (AWS) to build the VeCarbon emission management software as a service (SaaS) system for China.

VET has a market cap of $2.6 billion and is down about 0.6% over the past 24 hours, trading at $0.04 according to Coingecko data.

Ethereum Foundation’s Financial Report Discloses It Holds $1.6 Billion in Assets, 80.5% Held in Ether

April 18, 2022 Bitcoin.com

Riot Blockchain’s hashing capacity grew 460% in 2020: Report

April 1, 2021 Coin Telegraph

Bitcoin mining

Riot Blockchain has published its 2020 financials and revealed it has increased its hashrate by 460%.

According to its latest annual financial report, leading U.S.-based mining firm Riot Blockchain increased its hashing capacity by 460% and more than doubled the amount of Bitcoin held on its balance sheet in 2020.

Riot saw a 78% growth in total mining revenues from $6.7 million to $12 million, owing to the increase in operational hash rate from 101 pentahashes per second, or PH/s, as of December 2019 to 566 PH/s as of December 31.

While the company said it achieved profitability in the fourth quarter with $3.9 million in net income on a GAAP basis, Riot posted an overall net loss of $12.7 million for 2020.

However, this was an improvement over its 2019 performance, when it posted a net loss of roughly $20 million.

The company increased its cash and cryptocurrency holdings from $11.3 million in 2019 to $235 million last year, and doubled its Bitcoin holdings from 514 BTC to 1078 BTC — with its BTC stash worth roughly $63.6 million at the time of writing.

Riot noted that it is still reliant on equity and debt financing to fund its operations, with its deficit increasing from $221 million as of Q2 2020 to $299 million at the end of the fourth quarter.

The firm celebrated its “strategic decision to solely focus on Bitcoin mining” throughout 2020, positioning Riot as a leading miner globally by hash rate.

“We are pleased to have invested into continuing our deployed hash rate growth, allowing us to capitalize on the extraordinary current opportunities in Bitcoin mining.”

Riot is one of the four largest publicly traded Bitcoin mining firms alongside Marathon Digital Holdings, Hut 8, and Hive Blockchain. Despite all four firms reportedly operating at a loss, their stocks outperformed Bitcoin by 455% over the past 12 months on average.

Blockcap, one of North America’s fastest-growing Bitcoin mining firms, currently mines around seven Bitcoin per day, with the firm set to expand its output to 30,000 per day by the end of 2021, after they closed off two investment rounds with a combined haul of $75 million.

Riot’s shares tagged an all-time high of $77 on Feb. 17 but have since fallen 30%. By contrast, BTC is up roughly 15% since Feb. 17, having posted a record high of $61,700 on March 13.

Financial report