Kategorie: Crypto News

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Is Silvergate stock a ‘buy’ after it suspended preferred stock dividend?

  • Silvergate Capital Corp suspends dividend on its preferred stock.
  • Wedbush Securities analyst reiterates his neutral rating on “SI”.
  • Silvergate stock is currently down over 85% since mid-August.

Silvergate Capital Corp ended 5.0% down on Friday after the crypto bank suspended dividend on its preferred stock.

Silvergate is trying to preserve capital

The embattled digital currency services company is cutting back on the payout to preserve capital. Its press release reads:

This decision reflects the Company’s focus on maintaining a highly liquid balance sheet with a strong capital position. Company continues to maintain a cash position in excess of its digital asset customer related deposits.

The California-based company also confirmed that its Board will re-evaluate the quarterly payment once market conditions improve.

Silvergate stock has lost over 85% since mid-August, related partially to the FTX collapse. Consequently, billionaire investor Cathie Wood almost entirely pulled out of it at the start of the new year.

Is Silvergate stock a buy?

According to a Wedbush Securities analyst, suspending Series A preferred stock dividend will make things more difficult for this financial infrastructure solutions firm in the long run.

Reiterating his “neutral” rating on the Silvergate stock on Friday, David Chiaverini said:

We believe this move could raise Silvergate’s cost of capital down the road when Silvergate attempts to tap the capital markets for a future capital raise. Any new fixed income or preferred issuance will require a higher coupon.

His $13 price objective on the stock suggests it lacks any upside whatsoever. Earlier in January, Silvergate Capital Corp said average deposits from digital asset customers tanked 39% to $7.3 billion in its fourth quarter as Coin Journal reported here.

The post Is Silvergate stock a ‘buy’ after it suspended preferred stock dividend? appeared first on CoinJournal.

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Moody’s is building a scoring system for stablecoins: report

  • Moody’s wants to build a scoring system for stablecoins as the market grows amid increased regulatory attention.
  • The system will provide an rating system for the top stablecoins based on quality of their reserve attestations.
  • The leading stablecoins by market cap today are Tether (USDT), USD Coin (USD) and Binance USD (BUSD).

Moody’s Corporation, a leading global credit-ratings company, is reportedly developing a scoring system for the stablecoin industry.

A report by Bloomberg that cited sources familiar with the development, noted that Moody’s solution will not be an official credit rating. However, the integrated risk assessment giant is looking to deliver a platform that offers a scoring system based on a comprehensive analysis of the world’s largest stablecoins.

Moody’s already has a footprint in the crypto space, with major digital asset companies such as Coinbase getting credit ratings from the US-based provider. The credit rater also has a research unit that offers access to analytic reports touching on various issues in the crypto industry.

According to the report, the new system will offer access to ratings for up to 20 stablecoins, with the company utilizing the latest technology to score the asset-backed tokens. Among the most important metrics to consider will be the reserves and quality of attestations for each of the stablecoins.

People familiar with the project say its development is still in the early stages.

Moody’s to score major stablecoins

Stablecoins allow holders to participate in the crypto market, including in value transfer without being overly exposed to potentially high volatility characteristic of cryptocurrencies such as Bitcoin, Ethereum and so on.  But they are not without risks, particularly liquidity and manipulation.

It’s these issues that have seen stablecoins increasingly fall into regulatory spotlight, especially around reserves as they must maintain a 1:1 backing to the issued tokens.

Various issuers have attestation reports to ascertain indeed every stablecoin token is backed. But regulators want to see the sector streamlined to better protect investors. As CoinJournal recently reported, Bitwise Chief Compliance Officer Kathrine Dowling believes US stablecoin regulation will be ready before the end of 2023.

The top stablecoins today

The US dollar-pegged Tether (USDT) is the largest stablecoin with over $67.3 billion worth of tokens in circulation. USD Coin (USDC), another dollar backed stablecoin, follows with $43.2 billion coins in circulation. Meanwhile, Binance USD (BUSD) is the third largest with just over $15.4 billion worth of the tokens circulating.

According to data from CoinGecko, the stablecoin market capitalization currently stands at over $137 billion. More than $68 billion was traded in the past 24 hours as of 13:20 pm ET on 27 January, 2023.

The post Moody’s is building a scoring system for stablecoins: report appeared first on CoinJournal.

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Institutional investors are increasingly bullish on Ethereum: report

  • 60% of respondents are convinced Ethereum will a better investment in 2023. 
  • Bitcoin is also seen as one with huge potential, while other coins attracting institutional investors are Polkadot, Cardano and XRP.
  • Speculative interest and exposure to distributed ledger technology are main reasons for increased interest.

Ethereum is the second largest cryptocurrency by market cap, with its market worth nearly $190 billion. 

While it remains behind Bitcoin, whose market cap as of 27 January 2023 stood at over $482 billion, institutional investors are reportedly more bullish on the cryptocurrency’s prospects in 2023 than was the case going into the third quarter last year.

60% of institutional investors are bullish on Ethereum

According to the latest survey results published by digital assets manager CoinShares, bullish sentiment around the top altcoin by institutional investors has increased by 20% since the last survey in October 2022.

The asset manager’s report states that 60% of respondents from major wealth majors, family offices, hedge funds and financial advisors, believe Ethereum has a better growth outlook in 2023. In October, when CoinShares published its previous Digital Asset Quarterly Fund Manager Survey, 40% of respondents had indicated a bullish outlook for the leading smart contracts platform.

Comparatively, 30% of the survey participants were bullish on Bitcoin – down from 40% in the previous report. But while most of the big money is betting on ETH, CoinShares highlighted that a growing number of investors are invested in both assets.

Other digital assets that institutional investors are eyeing in 2023 are Polkadot, Cardano, XRP, Solana and Polygon.

Why are institutional investors adding crypto to portfolios?

According to CoinShares, the main reasons behind increased interest and investment in digital assets are speculation and the need to gain exposure to opportunities across the distributed ledger technology ecosystem. 

Notably, more clients saw the recent crypto crash (after the collapse of FTX) as an opportunity, with a growing number directing fund managers to add crypto to their positions. Bitcoin and Ethereum are the most popular.

But the asset manager says crypto’s increased correlation to equities might be the reason fewer investors cite diversification as a key factor.

“When asked what reasons prevented investors from investing in digital assets, it is interesting to note that reputational risk saw a significant decline while regulation is still an important consideration,” CoinShares noted.

The post Institutional investors are increasingly bullish on Ethereum: report appeared first on CoinJournal.

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Crypto bank Silvergate suspends preferred stock dividend

  • Crypto-friendly bank Silvergate announced its suspended payment of dividends on its series A preferred stock.
  • The company’s shares fell more than 11% pre-market after the announcement.
  • Silvergate reported a $1 billion loss in the fourth quarter and also cut its staff by 20% amid the crypto bear market and impact of FTX collapse.

Silvergate, a crypto-friendly bank that’s lately hit a rough stretch following the collapse of crypto exchange FTX, has suspended dividend payment on its preferred stock.

Specifially, the crypto bank says it is suspending payment of dividends on the its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. The US-based company is taking the move to help preserve capital following the effects of recent turbulence across the crypto ecosystem.

“This decision reflects the company’s focus on maintaining a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry,” the firm said in a press release.

According to the news release, the Board of Directors will re-examine the company’s payment of quarterly dividends at a later date, with this dependent on how “market conditions evolve.”

Silvergate shares fall sharply

Following Friday’s news, shares of parent company Silvergate Capital (NYSE:SI) fell more than 11% in early morning trading, hitting lows of $12.55.

Despite a decent run for crypto in the last few weeks, where Bitcoin broke above $23k, Silvergate’s shares have struggled amid negative sentiment.

At the time of writing, the shares were trading at around $12.93, still more than 8% down on the day. The company’s stock is down nearly 27% year-to-date, with the losses coming on the back of a brutal bear market for the broader cryptocurrency industry.

As previously highlighted, Silvergate reported a $1 billion loss during the fourth quarter and moved to slash its workforce by 20% as the negative impact of FTX’s implosion hit the company. 

The crypto bank also reported that customer digital assets deposits had fallen significantly as uncertainty swept through the crypto market.

The post Crypto bank Silvergate suspends preferred stock dividend appeared first on CoinJournal.

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Leading digital wealth platform Yield App acquires Trofi Group

  • Yield App is a digital wealth platform that offers safe custody of digital assets.
  • The platform allows customers to exchange and earn on their assets at market-leading rates.
  • The acquisition adds structured products to the Yield Apps product suite.

Digital wealth management platform Yield App yesterday announced it has acquired Trofi Group, a platform that offers structured solutions for cryptocurrencies. The acquisition brings four new structured products to the Yiled App product suite.

Besides providing customers with additional products, the move also makes Yield App one of the leading digital wealth platforms.

What specifically does Trofi Group bring on board?

The team at Trofi Group boasts of 30 years experience in derivatives desks at JP Morgan and HSBC. Now that they will join hands with Yield App in building best-in-class crypto-structured products means Yield App will provide a superior suite of products.

Commenting on the acquisition, the CEO of Yield App, Tim Frost, said:

“The acquisition of Trofi Group establishes Yield App as a pioneer within the crypto-structured products arena, making us one of only a few platforms to bridge the gap between traditional finance and crypto. We are grateful to the team at Trofi for trusting us to continue their excellent work in bringing enhanced yield structured products to crypto. We look forward to leveraging the team’s vast experience to expand Yield App’s suite of digital wealth management solutions.”

Following the acquisition, Yield App will be launching a beta version of a dedicated investment app duped “Trofi, powered by Yield App.” The app will allow customers to access Yield App’s first crypto-structured products through four different strategies and other products including the dual currency, the range, Sharkfin, and the Target.

Dual currency allows investors to acquire cryptocurrencies at a lower price at a predetermined point in the future, while also earning yield. The Range is a structured product that allows investors to generate yield assuming the markets will remain within a specified price range. Sharkfin allows investors with a moderately bullish view of future prices to earn a guaranteed minimum coupon with the potential to generate a high yield at maturity. The Target product allows investors with a bullish view of the future price of a cryptocurrency to earn a high yield.

The post Leading digital wealth platform Yield App acquires Trofi Group appeared first on CoinJournal.