The American bank Silvergate seems to have found a gap in the Bitcoin market, according to the latest quarterly figures. The quarterly figures look promising.
Their Silvergate Exchange Network provides a simple service: liquidity. You can contact them 24 hours, 7 days a week for fresh dollars. And in times when the Bitcoin Circuit rate is rising rapidly, that’s welcome for exchanges. It’s a nightmare for an exchange not to be liquid. And in a suddenly rising market, it’s a risk.
That’s what exchanges like Coinbase, Kraken, Bitstamp and Gemini have understood, because they are clients of Silvergate. They are less likely to find themselves at traditional large banks.
For example, $586 million has been deposited into accounts of Bitcoin companies and high net worth individuals. In total, Silvergate now serves about 928 customers with their money service. These are mainly institutional customers, approximately 600 of them.
This makes it the largest total of deposits since the bulk market at the end of 2017. At that time, the crypto currency passed the $20,000 mark.
How can this growth be explained? The price is rising sharply, listed companies suddenly see Bitcoin and Bitcoin companies are raising more and more growth money.
Turnover from the 68,000 transactions also increased: by almost 40%, to be precise at a number of $3.3 million.
The volume going through the network is also impressive: 36 billion dollars in a single quarter. In the whole of 2019, there was still talk of 32 billion dollars.
According to Silvergate, ‘the ecosystem continues to grow as more companies have Bitcoin on their balance sheet’.
Loans are also becoming more popular. A bitcoin exchange then deposits its Bitcoin at Silvergate and receives a loan in dollars in return. In quarter three, loans were made for 35.5 million dollars.
It is therefore mainly regulated American institutions that choose Silvergate as their liquidity provider and not a Tether USDT, for example. Institutional parties in particular want to run as little risk as possible when it comes to crypt currencies.
Bitcoin trading is mainly in the hands of centralized parties, which contrasts with Bitcoin’s original philosophy of decentralized payment.
However, the Bitcoin network is not dependent on these custodians. Every ten minutes a miner finds a new block containing 6.25 Bitcoin. That’s about 900 pieces a day.