- FDIC closed Silicon Valley Bank today and took control of its deposits.
- Austin Campbell says it could actually be a benefit for Signature Bank.
- Shares of Signature Bank ended more than 20% down on Friday.
Shares of Signature Bank (NYSE: SBNY) ended more than 20% down today following the collapse of its crypto banking peer SVB Financial.
SVB marks one of the largest U.S. bank failures
On Friday, the Federal Deposit Insurance Corporation closed the said bank and took control of its deposits &- a development that particularly shook financial stocks since such a bank failure was last seen only during the global financial crisis.
Remember that the news follows an announcement also from Silvergate Capital that it will liquidate its crypto bank. Consequently, a bunch of crypto companies in recent days picked Signature Bank as a replacement.
Still, the New York-based commercial bank says it’s exposure to digital assets is fairly small. “SBNY” is now down about 35% for the year.
Pro explains what it all means for Signature Bank
On the plus side, Austin Campbell of Zero Knowledge Consulting expects both Silvergate and the SVB news to actually be a benefit for Signature Bank.
He’s convinced that the diversified deposit base will help it avoid falling prey to the same structural weakness. In a tweet this afternoon, Campbell wrote:
Keep in mind you have to be a forced seller. Deposits moving from SVB go to other banks so this is likely improving the position of competitors like SBNY.
His view is in line with the JPMorgan analyst Vivek Juneja who also doesn’t expect the SVB fiasco to spill over to other banks. In January, Signature Bank said its net income increased just over 10% year-on-year in its fourth financial quarter.
The post Pro: SVB collapse may put this crypto bank in a stronger position appeared first on CoinJournal.
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