The tumultuous week for the U.S. banking sector continues to haunt the banks. Just within a week, four different banks have seen a rapid decrease in their stock prices.
In most recent outcomes a renowned crypto-friendly bank “Signature Bank” registered on the NASDAQ Stock Exchange (SBNY) has seen a brisk drop in its price.
On Friday, it has been noticed that there was a nearly 23% decline in the share price of SBNY.
Since Monday Till Now, the Bank’s Share has Dropped by 37%.
The plunged came after the bank’s top leadership announced that it’s no more supporting crypto operations and terminating its operations with Silvergate.
Silvergate is one of the world’s biggest crypto protocols. In addition to that recent week, the regulators in California penalized Wall Street’s top 18 banks.
Now When Signature Bank is Down By 22.87% What’s Next?
Signature Bank, which is known for its support of cryptocurrency, experienced a significant decrease of 22.87% in the value of its shares during Friday’s trading session.
Causing the shares to decline to the $70 mark.
The decrease in value that occurred on a particular day, as well as the significant overall drop of 37.30% since the start of the week.
It can be attributed to two factors: the present apprehension regarding banks that support digital assets and the general unease concerning banks in light of recent occurrences.
Silvergate Capital Corporation recently declared its intention to shut down its operations and liquidate its bank.
This decision was made due to the widespread problems that mainly arose due to the collapse of FTX.
Californian regulators intervened and shut down Silicon Valley Bank on Friday, which added to the already deteriorating conditions for banks in the United States.
This is considered a monumental failure; since the financial crisis in 2008, there has not been any institution insured by the Federal Deposit Insurance Corporation (FDIC).
The concerns regarding the U.S. banking sector have had an adverse impact on the entire banking sector.
On Wednesday, multiple reports argued one of the USA’s largest banks J.P Chase Morgan has decided to terminate its operations with Gemini Trust; another crypto protocol.
However, Gemini has refuted these claims.
The Banking Crisis for Crypto Firms is Getting Bad to Worse
Although the decline in Signature’s stock value may not be a clear indication of its inability to succeed.
It is still concerning as more and more banks are becoming hesitant to work with cryptocurrency firms.
Despite reducing its investment in digital assets, the bank is still a significant collaborator for certain prominent exchanges.
In another developing story, the closure of Silicon Valley Bank on Fridays is causing concerns that the digital assets industry may suffer another significant setback.
Amid these banking and crypto collaboration concerns, the share price of Coin Base dropped by 8% back on Friday.
Additionally, it was emphasized later on Friday that although the primary emphasis of Silicon Valley Bank was on venture capital firms. But its association with the cryptocurrency industry was also significant.
The Silicon Valley Bank as of today still holds uninsured digital assets that are estimated at around $227 million.
Silicon Valley Bank has notified certain customers that wire transfers may experience a delay.
Several clients have already reported that they are experiencing issues when attempting to access their account details and perform transfers on the firm’s website.
The bank’s entire stock index has experienced a significant decline due to the outflow of overnight deposits. Hence, there has been a decrease in the value of the bank’s stocks.
The bank’s profits have also been squeezed. Over the past few days, things have been breaking down for the U.S. banking sector.
Particularly those banks that provide support to digital assets have been pinpointed by the regulators. So, investors must avoid purchasing the stocks of such banks.
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