{"id":16203,"date":"2023-01-07T08:01:22","date_gmt":"2023-01-07T08:01:22","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/jim-cramer-explains-silvergates-failure-on-mad-money\/"},"modified":"2023-01-07T08:01:22","modified_gmt":"2023-01-07T08:01:22","slug":"jim-cramer-explains-silvergates-failure-on-mad-money","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/jim-cramer-explains-silvergates-failure-on-mad-money\/","title":{"rendered":"Jim Cramer explains Silvergate\u2019s failure on Mad Money"},"content":{"rendered":"<p><b>(Originally posted on : CoinJournal: Latest Bitcoin, Ethereum &amp; Crypto News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"post-article-image  -mt-24  mb-8  lg:-mt-32  rounded  overflow-hidden\">\n<picture><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/1970\/01\/1643139719162-a39ad513-a9ba-4408-be38-9ab1e8bb178f-smartcrop-750x375.webp\" type=\"image\/webp\" media=\"(min-width: 750px)\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/1970\/01\/1643139719162-a39ad513-a9ba-4408-be38-9ab1e8bb178f-smartcrop-363x181.webp\" type=\"image\/webp\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/1970\/01\/1643139719162-a39ad513-a9ba-4408-be38-9ab1e8bb178f-smartcrop-750x375.jpg\" type=\"image\/jpeg\" media=\"(min-width: 750px)\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/1970\/01\/1643139719162-a39ad513-a9ba-4408-be38-9ab1e8bb178f-smartcrop-363x181.jpg\" type=\"image\/jpeg\"\/><\/picture><\/div>\n<ul>\n<li>Shares are down by more than 90% from their all-time high in November 2021\u00a0<\/li>\n<li>Silvergate is a \u201cgreat example of everything that\u2019s wrong with this industry\u201d \u00a0<\/li>\n<li>They were working on a MMF, the most dangerous link in the crypto chain <\/li>\n<\/ul>\n<p>Jim Cramer <a href=\"https:\/\/www.cnbc.com\/video\/2023\/01\/06\/cramer-explains-why-silvergate-is-a-pivotal-part-of-the-crypto-ecosystem.html\">talked about<\/a> why Silvergate is a \u2018pivotal\u2019 part of the crypto ecosystem on Mad Money, CNBC.<\/p>\n<p>Silvergate\u2019s shares plummeted, losing more than 43% yesterday, then another 2% or so. They are down by more than 90% from their all-time high in November 2021. According to the bank, the crypto industry\u2019s breakdown caused a run on deposits, prompting it to fire 40% of its staff and sell assets at a major loss. Silvergate held deposits for FTX units and <a href=\"https:\/\/coinjournal.net\/news\/alameda-liquidates-millions-worth-of-tokens-for-bitcoin\/\">Alameda<\/a>.\u00a0<\/p>\n<h2>Stocks can always go lower\u00a0<\/h2>\n<p>According to Cramer, stocks can always go lower and as long as they\u2019re above zero, it\u2019s fine. However, Silvergate is a pivotal part of the crypto ecosystem because it\u2019s a \u201cgreat example of everything that\u2019s wrong with this industry.\u201d Cramer said:\u00a0<\/p>\n<p><em>The bank made a series of horrifying disclosures, which caused (the drastic fall). If we don\u2019t address it, I worry that the market cap will shrink to the point where we won\u2019t be allowed to talk about it on air.\u00a0<\/em><\/p>\n<h2>History of Silvergate Bank<\/h2>\n<p>Silvergate Bank was founded as a savings and loan association in 1988. It was transformed into a bank in 1996 by Dennis Frank and Derek J. Eisele. At first, it was quite small with just three branches in southern California.\u00a0<\/p>\n<p>In 2013, CEO Alan Lane made a personal investment in Bitcoin, and the bank went into crypto. They launched services to companies in the crypto space, especially <a href=\"https:\/\/coinjournal.net\/exchanges\/\">crypto exchanges<\/a>. They got in very early according to Cramer, when most banks didn\u2019t want to have anything to do with Bitcoin. Then, it was \u201creally only Bitcoin.\u201d\u00a0<\/p>\n<p>Silvergate grew rapidly thereafter, reaching $1.9 billion in assets by 2017. The company was listed in November 2019 at a stock price of $13. The price had risen by 1580% in November 2021.\u00a0<\/p>\n<h2>Why did they fail?<\/h2>\n<p>As mentioned, the price is now down over 90% from then. Cramer explains:<\/p>\n<p><em>Silvergate established the Silvergate Exchange Network (SEN), a payment network for the crypto space. You can send USD to other Silvergate customers instantly, 24\/7, just like crypto transactions. The bank also offered loans with Bitcoin as collateral. They were working on their own stablecoin, like a pseudo money market fund (MMF) that allows you to go in and out of the market without friction, which is the most dangerous link in the crypto chain.<\/em><\/p>\n<div class=\"post-meta\">\n<hr class=\"mb-6\"\/>\n<h6 class=\"text-3xl  mb-4  text-green-300\">Share this article<\/h6>\n<hr class=\"mb-6\"\/>\n<h6 class=\"text-3xl  mb-4  text-green-300\">Categories<\/h6>\n<\/p><\/div>\n<\/p><\/div>\n<p><a href=\"https:\/\/coinjournal.net\/news\/jim-cramer-explains-silvergates-failure-on-mad-money\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : CoinJournal: Latest Bitcoin, Ethereum &amp; Crypto News ) Shares are down by more than 90% from their all-time high in November 2021\u00a0 Silvergate is a \u201cgreat example of everything that\u2019s wrong with this industry\u201d \u00a0 They were working on a MMF, the most dangerous link in the crypto chain Jim Cramer [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":16204,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/16203"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=16203"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/16203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/16204"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=16203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=16203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=16203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}