Cryptocurrencies

[ValueArb]

1 hour ago, wachtwoord said:

 

Bitcoin is the thing itself.

 

It's like saying a gold bar has no IV because it does not constitute a claim on something else.

 

A bond is a claim on something with no IV.

 

So the IV of Bitcoin is a small amount of text data on a server? 

 

You were so close. A gold bar has no IV because it has no claim on future cash flows. Gold does have a lot of utility however, for making electronics and making your significant other happy. 

 

And the fact that you do not understand how bonds work goes a long way towards explaining your love of crypto. You should read a bond indenture some day. I'd read a bitcoin indenture, but it doesn't have one.

[wachtwoord]

58 minutes ago, ValueArb said:

 

So the IV of Bitcoin is a small amount of text data on a server? 

 

 

Why have a strong opinion about something you clearly have no clue what it is?

 

That's been my question since the start.

[ValueArb]

2 hours ago, wachtwoord said:

 

Why have a strong opinion about something you clearly have no clue what it is?

 

That's been my question since the start.

 

Thats a great question I have had since you opined about bonds.

[SharperDingaan]

On 12/27/2022 at 2:11 PM, ValueArb said:

Now different people may measure IV differently, that doesn't mean it doesn't exist. What that means is sometimes its hard to know what the IV of an investment is, but that doesn't mean it doesn't exist. You just lack the information to make your IV estimate trustworthy. 

 

Since no crypto has claim to any future cash flows, all crypto has an IV of zero. That doesn't mean some crypto (BTC, ETH) doesn't have utility, esp. for people trapped in countries with terrible governance. But it doesn't give either of them an intrinsic value.

 

Expressing this as an algorithm ...

 

IV = PV expected future cashflows + PV utility

Utility = highest utility value as an inflation store of value, utility as an alternate to bullion as a store of value, utility as a private payment system. Valuation depends on the holders needs and view.

 

It is hard to value the PV utility (... we lack the information); therefore IV =  PV expected future cashflows (asset definition). BTC does not have future cashflows, therefore IV = zero. Q.E.D!

And .... the world goes batsh1t crazy !!! ..... Why?

 

Because .... IV = PV utility.

> Finance folks go apesh1t, WTF!! this sh1te has ZERO value, and yet the market says no. Repeatedly! 

> Libertarians go apesh1t. Freedom from CB tyranny has obvious value! finance folks just don't get it!!

> 2nd/3rd world folks go apesh1t. Fungible, portable, wealth has obvious value! Rich folks just don't get it !!! 

 

PV utility is simply cash paid for the future benefit.

In the GAAP world. 'Goodwill' - as the amount paid > PV market cash flows.

In the trading world. Whatever the counterparty agrees to pay for it.

 

Hence to value BTC, one has to value the PV utility to its beneficial owner.

Everybody will have a different number, and it will be higher the longer the beneficial owner is willing to hold. If you simply held BTC as a hedge against inflation ... every year the worlds CB's inflate their currencies - you benefit by a portion of that total inflation divided over 21M token. Every year, BTC values at a higher fiat price (USD, EUR, GBP, CAD, etc.)

 

Different take 

 

SD

Edited December 29, 2022 by SharperDingaan

[wachtwoord]

14 hours ago, SharperDingaan said:

 

Expressing this as an algorithm ...

 

IV = PV expected future cashflows + PV utility

Utility = highest value of utility as an inflation store of value, utility as an alternate to bullion as a store of value, utility as a private payment system. Valuation depends on the holders needs and view.

 

It is hard to value the PV utility (... we lack the information); therefore IV =  PV expected future cashflows (asset definition). BTC does not have future cashflows, therefore IV = zero. Q.E.D!

And .... the world goes batsh1t crazy !!! ..... Why?

 

Because .... IV = PV utility.

> Finance folks go apesh1t, WTF is this!! this sh1te has ZERO value, and yet the market says no - repeatedly! 

> Libertarians go apesh1t. Freedom from CB tyranny has obvious value! finance folks just don't get it!!

> 2nd/3rd world folks go apesh1t. Fungible, portable, wealth has obvious value! Rich folks just don't get it !!! 

 

PV utility is simply cash paid for the future benefit.

In the GAAP world. 'Goodwill' - as the amount paid > PV market cash flows.

In the trading world. Whatever the counterparty agrees to pay for it.

 

Hence to value BTC, one has to value the PV utility to its beneficial owner. Everybody will have a different number, and it will be higher the longer the beneficial owner is willing to hold. If you simply held BTC as a hedge against inflation ... every year the worlds CB's inflate their currencies - you benefit by a portion of that total inflation divided over 21M tokens!

 

Different take 

 

SD

 

Nice way to put it

[ValueArb]

16 hours ago, SharperDingaan said:

 

Expressing this as an algorithm ...

 

IV = PV expected future cashflows + PV utility

Utility = highest utility value as an inflation store of value, utility as an alternate to bullion as a store of value, utility as a private payment system. Valuation depends on the holders needs and view.

 

It is hard to value the PV utility (... we lack the information); therefore IV =  PV expected future cashflows (asset definition). BTC does not have future cashflows, therefore IV = zero. Q.E.D!

And .... the world goes batsh1t crazy !!! ..... Why?

 

Because .... IV = PV utility.

> Finance folks go apesh1t, WTF!! this sh1te has ZERO value, and yet the market says no. Repeatedly! 

> Libertarians go apesh1t. Freedom from CB tyranny has obvious value! finance folks just don't get it!!

> 2nd/3rd world folks go apesh1t. Fungible, portable, wealth has obvious value! Rich folks just don't get it !!! 

 

PV utility is simply cash paid for the future benefit.

In the GAAP world. 'Goodwill' - as the amount paid > PV market cash flows.

In the trading world. Whatever the counterparty agrees to pay for it.

 

Hence to value BTC, one has to value the PV utility to its beneficial owner.

Everybody will have a different number, and it will be higher the longer the beneficial owner is willing to hold. If you simply held BTC as a hedge against inflation ... every year the worlds CB's inflate their currencies - you benefit by a portion of that total inflation divided over 21M token. Every year, BTC values at a higher fiat price (USD, EUR, GBP, CAD, etc.)

 

Different take 

 

SD

 

Inflation has gone nuts since April 2021, clearly Fiat is depreciating.

 

Over that same period BTC has dropped 70%. What a fantastic inflation hedge!

[Spekulatius]

17 hours ago, SharperDingaan said:

 

Expressing this as an algorithm ...

 

IV = PV expected future cashflows + PV utility

Utility = highest utility value as an inflation store of value, utility as an alternate to bullion as a store of value, utility as a private payment system. Valuation depends on the holders needs and view.

 

It is hard to value the PV utility (... we lack the information); therefore IV =  PV expected future cashflows (asset definition). BTC does not have future cashflows, therefore IV = zero. Q.E.D!

And .... the world goes batsh1t crazy !!! ..... Why?

 

Because .... IV = PV utility.

> Finance folks go apesh1t, WTF!! this sh1te has ZERO value, and yet the market says no. Repeatedly! 

> Libertarians go apesh1t. Freedom from CB tyranny has obvious value! finance folks just don't get it!!

> 2nd/3rd world folks go apesh1t. Fungible, portable, wealth has obvious value! Rich folks just don't get it !!! 

 

PV utility is simply cash paid for the future benefit.

In the GAAP world. 'Goodwill' - as the amount paid > PV market cash flows.

In the trading world. Whatever the counterparty agrees to pay for it.

 

Hence to value BTC, one has to value the PV utility to its beneficial owner.

Everybody will have a different number, and it will be higher the longer the beneficial owner is willing to hold. If you simply held BTC as a hedge against inflation ... every year the worlds CB's inflate their currencies - you benefit by a portion of that total inflation divided over 21M token. Every year, BTC values at a higher fiat price (USD, EUR, GBP, CAD, etc.)

 

Different take 

 

SD

The value of bitcoin is the value of it's utility - that's one valuation method I can agree upon. For me, the utility value of bitcoin seems very low, for others that may not be the case.

If you are in Russia and want to flee the country, it will be difficult to get USD, but you may be able to convert Ruble into BTC or ETH or stablecoin or gold , diamonds or another cryptocurrency.

 

Crypto will be better if I need to move out of the country, don't like swallowing diamonds and BTC is less volatile (cough) than the rest, so might be the best option. That's for the guy in Russia who wants to flee his country though.

 

The question is why should I buy BTC if I have no personal use for it, but think that somebody else will? If so, how much is this particular utility for all the cryptos worth? Why should it be worth more than $50B, just to throw one number out?

[ValueArb]

1 hour ago, Spekulatius said:

The value of bitcoin is the value of it's utility - that's one valuation method I can agree upon. For me, the utility value of bitcoin seems very low, for others that may not be the case.

If you are in Russia and want to flee the country, it will be difficult to get USD, but you may be able to convert Ruble into BTC or ETH or stablecoin or gold , diamonds or another cryptocurrency.

 

Crypto will be better if I need to move out of the country, don't like swallowing diamonds and BTC is less volatile (cough) than the rest, so might be the best option. That's for the guy in Russia who wants to flee his country though.

 

The question is why should I buy BTC if I have no personal use for it, but think that somebody else will? If so, how much is this particular utility for all the cryptos worth? Why should it be worth more than $50B, just to throw one number out?

 

This.

 

I think the disconnect between crypto adherents and value investors is that crypto adherents want to imagine some type of Intrinsic Value for crypto when there clearly is none. To the point of trying to redefine Intrinsic Value to claim some.

 

I don't think anyone disagrees that some crypto (BTC and ETH specifically) has utility. Not just to criminals but to good people trapped in terrible countries. But Utility isn't Intrinsic Value and because of that you can't determine a value for crypto. It's Utility will wax and wane over time, but there is no evidence it's Utility significantly affects Crypto's price today.

 

All evidence is that the last two years Crypto had massive inflows because of speculation driven by stimulus and low interest rates. The end of stimulus and low interest rates has coincided with the "crypto winter". If that's not proof enough, compare crypto to speculative tech stocks. Chart BTC vs. ARKK, and it's eery how much in lock step they've been the last 5 years. 

 

I don't think BTC will ever drop back to $100, or even $1,000. That would be a $20B market cap, which seems very small in a world full of criminals and terrible countries. But I see no reason why it needs to be $10,000 or even $5,000. Given the massive amount of margin debt used in the crypto space, BTC could easily overshoot into the low thousands as everyone (including Saylor) get liquidated. Then someday there will be loose money again. BTC will double, word will spread and before you know it people will pile back in and who knows where it goes.

 

I don't. I'm a value investor so I try to buy things that I have a high confidence that their value is higher than their price, and that that value is growing so that eventually the right forces will bring price and value into alignment. Outside of country arbitrage that I don't have the resources to pull off, I don't see any value in crypto.

[SharperDingaan]

If I just want a short term speculation, there are many much more effective options than simply buying/selling BTC. I could wait for a greater fool to show up, in literally thousands of much cheaper investment vehicles; all with much more appealing story lines to the punters of the day. 

 

BTC as an inflation hedge, is measured from date of trade through to PTD.

Until all BTC are issued; every time the BTC mining reward halves - the current BTC inflation rate drops 50%. Once all BTC have been issued the BTC inflation rate is zero, and BTC becomes a perfect inflation hedge. My BTC is down 70% this year has nothing to do with its inflation hedge property; you just made a sh1te trade 

 

If I just want a short term trading sardine, BTC isn't it.

Momentum trading off popularity, only works if you don't get caught holding the bag. 

 

SD

 

 

 

[Dave86ch]

21 hours ago, ValueArb said:

 

Inflation has gone nuts since April 2021, clearly Fiat is depreciating.

 

Over that same period BTC has dropped 70%. What a fantastic inflation hedge!

The depreciation machine starts running faster after the GFC, exactly when BTC was born.

[TwoCitiesCapital]

23 hours ago, ValueArb said:

 

Inflation has gone nuts since April 2021, clearly Fiat is depreciating.

 

Over that same period BTC has dropped 70%. What a fantastic inflation hedge!

 

TIPS didn't do well either. Guess they're a total failure as an inflation hedge too! 

 

Either that, or you have to consider other risk factors within the investment instrument and/or zoom out from 18 months to 5-10 years to see the efficacy of the inflation hedging. 

 

You keep harping on BTC being down 70-80%. I keep pointing out that over just about any 5-year period, and 10-year period, it's the best performing asset class - even after the 80% drop. And that's generally been true EVERY time it's dropped like this.

 

Really the only month that isn't true for is if you bought during December 2017 - and even then it's likely true unless if you bought in the last week or two of December when it had it's last blow off top and went from 7k to 20k in a month. 

 

So as long as your time horizon is 18 months and that's how you "invest" for "intrinsic value", fine! BTC is a terribly risky investment over any 18 month period. But so are stocks and bonds as they've just proven because 18 months is still the popularity contest and not the weighing machine. 

 

If you extend that time horizon, BTC looks a hell of a lot better even measuring from the bottom of its current drop. 

 

 

Edited December 30, 2022 by TwoCitiesCapital

[ValueArb]

2 hours ago, TwoCitiesCapital said:

 

TIPS didn't do well either. Guess they're a total failure as an inflation hedge too! 

 

Either that, or you have to consider other risk factors within the investment instrument and/or zoom out from 18 months to 5-10 years to see the efficacy of the inflation hedging. 

 

You keep harping on BTC being down 70-80%. I keep pointing out that over just about any 5-year period, and 10-year period, it's the best performing asset class - even after the 80% drop. And that's generally been true EVERY time it's dropped like this.

 

Really the only month that isn't true for is if you bought during December 2017 - and even then it's likely true unless if you bought in the last week or two of December when it had it's last blow off top and went from 7k to 20k in a month. 

 

So as long as your time horizon is 18 months and that's how you "invest" for "intrinsic value", fine! BTC is a terribly risky investment over any 18 month period. But so are stocks and bonds as they've just proven because 18 months is still the popularity contest and not the weighing machine. 

 

If you extend that time horizon, BTC looks a hell of a lot better even measuring from the bottom of its current drop. 

 

 

 

We are both cherry picking timelines.

 

In your case the life of Bitcoin was created at the same time the federal funds rate was cut to the lowest levels in its history, and until the end of this year it only existed in during a long period of record historical low interest rates. Finally ts price peaked at the end of the largest federal stimulus in history. 

 

If interest rates stay high, BTC is likely to start having some pretty poor 5 year performance periods. It has a zero track record across a normal economic cycle with median historical interest rates. 

 

And so far in its short life it has performed well when there was no inflation and very poorly since inflation re-appeared. 

[TwoCitiesCapital]

3 hours ago, ValueArb said:

 

We are both cherry picking timelines.

 

In your case the life of Bitcoin was created at the same time the federal funds rate was cut to the lowest levels in its history, and until the end of this year it only existed in during a long period of record historical low interest rates. Finally ts price peaked at the end of the largest federal stimulus in history. 

 

If interest rates stay high, BTC is likely to start having some pretty poor 5 year performance periods. It has a zero track record across a normal economic cycle with median historical interest rates. 

 

And so far in its short life it has performed well when there was no inflation and very poorly since inflation re-appeared. 

 

1) it performed just fine in the hiking cycle of 2015 - 2018. So it killed it during one hiking cycle and sucked air this hiking cycle. Hard to really discern a trend in response to Fed policy so far. 

 

2) "if interest rates stay high" is an incredibly big assumption seeing as they've failed to do so for the last 15 years straight and have been in a downtrend for the better part of 40-years. You're predicting the change of a multi-decade trend to declare the end of BTC and it is not yet clear if that trend is over or not. 

 

As we're seeing now with the current global economic weakness, falling corporate earnings, contractionary PMIs, inverted yield curve, and low long-term rates - EVERYTHING is screaming that rates can't stay here. Maybe they do, but I highly doubt it so you probably need a plan B to hate on BTC going forward. 

 

3) I'm not cherry picking time lines. My time line includes the current 80% drop. It includes both rising and falling rate cycles for the 5-year period and two complete rate cycles for the 10-year numbers. 

 

It's not like I'm saying "it's performance would have been this if not for the drop". I'm saying even with the drop, it's performance has been admirable. You're the only one cherry picking data from a half-cycle by ignoring the last 10 years of returns and only focusing on the a single hiking cycle of the last 18 or so months.

 

You also seem to ignore that this isn't the first time BTC has dropped by 80-90% - all of which is captured in my time frames....yet somehow I'm cherry picking to fit a narrative? 

Edited December 30, 2022 by TwoCitiesCapital

[ValueArb]

1 hour ago, TwoCitiesCapital said:

 

1) it performed just fine in the hiking cycle of 2015 - 2018. So it killed it during one hiking cycle and sucked air this hiking cycle. Hard to really discern a trend in response to Fed policy so far. 

 

2) "if interest rates stay high" is an incredibly big assumption seeing as they've failed to do so for the last 15 years straight and have been in a downtrend for the better part of 40-years. You're predicting the change of a multi-decade trend to declare the end of BTC and it is not yet clear if that trend is over or not. 

 

As we're seeing now with the current global economic weakness, falling corporate earnings, contractionary PMIs, inverted yield curve, and low long-term rates - EVERYTHING is screaming that rates can't stay here. Maybe they do, but I highly doubt it so you probably need a plan B to hate on BTC going forward. 

 

3) I'm not cherry picking time lines. My time line includes the current 80% drop. It includes both rising and falling rate cycles for the 5-year period and two complete rate cycles for the 10-year numbers. 

 

It's not like I'm saying "it's performance would have been this if not for the drop". I'm saying even with the drop, it's performance has been admirable. You're the only one cherry picking data from a half-cycle by ignoring the last 10 years of returns and only focusing on the a single hiking cycle of the last 18 or so months.

 

You also seem to ignore that this isn't the first time BTC has dropped by 80-90% - all of which is captured in my time frames....yet somehow I'm cherry picking to fit a narrative? 

 

A 40 year downtrend in interest rates is a blip in economic history. Rates are always higher than the last decade because governments always inflate and lenders need compensation for it. If you really think that economic weakness, corporate earnings, inverted yield curve, etc matter more than $30T in debt and rapidly rising debt servicing costs I guess we'll just have to disagree.

[TwoCitiesCapital]

1 hour ago, ValueArb said:

 

A 40 year downtrend in interest rates is a blip in economic history. Rates are always higher than the last decade because governments always inflate and lenders need compensation for it. If you really think that economic weakness, corporate earnings, inverted yield curve, etc matter more than $30T in debt and rapidly rising debt servicing costs I guess we'll just have to disagree.

 

You're going to tell me 40 years is a blip in economic history while focusing you're entire thesis on the last 18 months....

 

Give me a f*cking break....

 

And $30T in debt is deflationary, bud! At 5% rates, were talking over 1.5T a year just in interest. That's nearly 40% of government tax receipts not considering we're still running massive deficits even before we've gotten there. 

 

The government will eventually inflate it away, but that doesn't mean interest rates will rise to reflect that. The Fed/govt will collude to have negative real rates like they always have historically and rates will never approach or exceed inflation until it's been whittled down. inflation will run hitter than the last decade, but we're talking like 3-4% per year instead of 1-2% and you're not going to see interest rates above those levels for prolonged periods of time because the government literally can't afford it. 

 

We're not going back to 10-15% rates. 30 trillion of debt doesn't allow for it.  Your high water mark this cycle is very likely to be 4.25% on the 10-year. 

 

The only thing that will result in a rate move similar to that of the 70s is the USD imminently losing reserve status. I believe that eventually happens - but not in the near term. 

Edited December 30, 2022 by TwoCitiesCapital

[rkbabang]

1 hour ago, TwoCitiesCapital said:

The only thing that will result in a rate move similar to that of the 70s is the USD imminently losing reserve status. I believe that eventually happens - but not in the near term. 

yes it will eventually happen, and you can probably guess what I think will replace it?   No one is going to want to give one nation the kind of power the US has enjoyed with its currency being the reserve currency of the world.  One by one everyone is going to switch to something neutral and stable. “Stable” meaning can’t be messed with or controlled.

[ValueArb]

2 hours ago, TwoCitiesCapital said:

And $30T in debt is deflationary, bud! At 5% rates, were talking over 1.5T a year just in interest. That's nearly 40% of government tax receipts not considering we're still running massive deficits even before we've gotten there. 

 

....

 

We're not going back to 10-15% rates. 30 trillion of debt doesn't allow for it.  Your high water mark this cycle is very likely to be 4.25% on the 10-year. 

 

There is no way the feds can stop the inevitable rise in interest rates. Our debt to GDP rate is the highest in our history, inflation is still roaring and the fed has already committed to 6%+ rates next year. No one is going to go back to loaning the US government money at 1% a year.

[TwoCitiesCapital]

Just now, ValueArb said:

 

There is no way the feds can stop the inevitable rise in interest rates. Our debt to GDP rate is the highest in our history, inflation is still roaring and the fed has already committed to 6%+ rates next year. No one is going to go back to loaning the US government money at 1% a year.

 

Europe and Japan have higher debt loads, aren't the reserve currency, and have lower rates. Revisit your thesis. 

[ValueArb]

16 hours ago, TwoCitiesCapital said:

 

Europe and Japan have higher debt loads, aren't the reserve currency, and have lower rates. Revisit your thesis. 

 

How much debt is too much? Where do you think the line is? Where should I get concerned?

 

If inflation persists and our debt rolls over at new rates (ave duration only 5 years) our annual servicing costs would approach 2 trillion. Thats a few years off and requires a total failure of inflation fighting efforts, but it still frightens me.

[Spekulatius]

2 hours ago, ValueArb said:

 

How much debt is too much? Where do you think the line is? Where should I get concerned?

 

If inflation persists and our debt rolls over at new rates (ave duration only 5 years) our annual servicing costs would approach 2 trillion. Thats a few years off and requires a total failure of inflation fighting efforts, but it still frightens me.

Unless we get positive rates after taking into account inflation, debt service costs in inflation adjusted dollars is negative and debt is not a problem.

[dealraker]

This thread really works on my concepts and worldliness.  Lots of posts came a few months ago after I sort of took my turn (as many have) and stirred the pot a little.  Then I read the "Bitcoin will without a doubt be worth $1 mil by 2025...well surely no later than 2035" posts.  And shortly afterwards there was "I have 5k invested in it."

 

At that point I turned my head and stared out the window down the lake a few miles for a while.  Gazing far off in the distance enables or facilitates some of us to grasp the vast world we live in where people think far differently from one another.  

Edited January 1, 2023 by dealraker
Spellin'

[rkbabang]

1 hour ago, dealraker said:

This thread really works on my concepts and worldliness.  Lots of posts came a few months ago after I sort of took my turn (as many have) and stirred the pot a little.  Then I read the "Bitcoin will without a doubt be worth $1 mil by 2025...well surely no later than 2035" posts.  And shortly afterwards there was "I have 5k invested in it."

 

At that point I turned my head and stared out the window down the lake a few miles for a while.  Gazing far off in the distance enables or facilitates some of us to grasp the vast world we live in where people think far differntly from one another.  

What?  Who thinks it’s going to be $1M by 2025 and only has $5K invested? I must have missed that post.

[ValueArb]

2 hours ago, rkbabang said:

What?  Who thinks it’s going to be $1M by 2025 and only has $5K invested? I must have missed that post.

Cathie Woods might be getting low on dry powder.

[TwoCitiesCapital]

On 12/31/2022 at 1:02 PM, ValueArb said:

 

How much debt is too much? Where do you think the line is? Where should I get concerned?

 

If inflation persists and our debt rolls over at new rates (ave duration only 5 years) our annual servicing costs would approach 2 trillion. Thats a few years off and requires a total failure of inflation fighting efforts, but it still frightens me.

 

You tell me. The thought frightens me too. But Japan and Europe have higher inflation, higher debt, lower growth, worse demographics, and no reserve currency status and still have lower rates then us. 

 

I need a more compelling reason why rates are headed higher here and why the last 18 months is a game changer when we're ignoring decades before that

 

 

Edited January 2, 2023 by TwoCitiesCapital

[UK]

https://www.wsj.com/articles/silvergate-raced-to-cover-8-1-billion-in-withdrawals-during-crypto-meltdown-11672895207

 

Crypto-related deposits plunged 68% in the fourth quarter, the bank said in an early release of some quarterly results. To satisfy the withdrawals, Silvergate liquidated debt it was holding on its balance sheet. The $718 million it lost selling the debt far exceeds the bank’s total profit since at least 2013.

 

Silvergate was able to survive such a steep decline in deposits because it isn’t structured like most banks. It sold off much of its traditional banking operations and branches to focus on providing bank accounts to crypto exchanges and investors. Crypto-related deposits account for some 90% of the bank’s total, and it keeps almost all of its deposits in cash or easy-to-sell securities. At the end of the fourth quarter, Silvergate said it had more cash on hand, $4.6 billion, than its $3.8 billion in remaining deposits. And it held another $5.6 billion in debt securities such as U.S. Treasurys that could be sold quickly. Daily average volume on Silvergate’s network rose in the fourth quarter, the bank said. 

 

On a call with analysts Thursday morning, Silvergate executives said customers didn’t simply close out their accounts; rather, they told the bank they were moving their money out of crypto and thus didn’t need to keep so much of it with Silvergate. Even customers who are focused on digital currencies pulled their cash to invest in supersafe assets like Treasurys, executives said. “Our customers have taken a huge pause,” Chief Executive Alan Lane said.