Silvergate Bank: How Deep Is the Moat?

Silvergate Bank has pioneered financial services for crypto startups. But now it faces new rivals. Can it deepen its competitive moat?

AccessTimeIconSep 29, 2020 at 11:00 a.m. UTC
Updated May 9, 2023 at 3:11 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

While not often in the limelight, Silvergate Bank serves as an integral part of the cryptocurrency ecosystem.

It’s often claimed by crypto enthusiasts that bitcoin will eventually displace the financial system as we know it. As it stands today, however, banks still play the pivotal role of fiat on/off ramps for exchanges and investors.

  • Inside Saga's 'Power-Level Over 9000' Campaign
    Inside Saga's 'Power-Level Over 9000' Campaign
  • Saga CEO on Chainlets Feature
    Saga CEO on Chainlets Feature
  • DOJ Wants CZ to Serve 3 Years in Prison; Tether to Freeze Wallets Evading Venezuelan Sanctions
    DOJ Wants CZ to Serve 3 Years in Prison; Tether to Freeze Wallets Evading Venezuelan Sanctions
  • What's Driving HBAR's Roller-Coaster Ride?
    What's Driving HBAR's Roller-Coaster Ride?
  • CoinDesk Research presents an in-depth look into San Diego-based Silvergate Bank, a leading bank serving the cryptocurrency industry. With over 880 digital asset clients with an aggregate balance of $1.5 billion in deposits, Silvergate is one of the market leaders within this niche market.

    Some takeaways:

    • Due to increased levels of risk and higher compliance requirements, there exist only a handful of U.S. banks, including Silvergate, who provide banking services to cryptocurrency customers.
    • Silvergate sets itself apart through its deep list of industry connections as well is its unique products that cater to the digital asset industry such as its instant payment network, SEN.
    • The total number of customers continues to increase, but Silvergate’s deposits have failed to grow over the past two years. Despite the utility of SEN, management notes the bank has experienced deposit outflows to competitors offering yield on deposits, unlike Silvergate whose deposit base is almost exclusively non-interest bearing.
    • As the space matures, it’s likely more banks will feel compelled to service the crypto market, just as JPMorgan recently announced its acceptance of Coinbase and Gemini as its first digital asset customers. This type of development could be a major cause for concern for Silvergate as it competes with much larger financial institutions with more access to capital. Should this become the case, it will become crucial for Silvergate to deepen its competitive moat by boosting SEN’s utility.

    Read the full report here.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.